Half of American adults
don't have a will

A story published today in the Asbury Park Press observes that people have many misconceptions about estate planning.

Some think it's something only old people need to do. Others think it's all about avoiding taxes, or that it's only about money.

But proper estate planning — while it can involve all those things — is much more. It's about who gets your possessions when you die. It's about who raises your children if they're still minors. It's about who makes critical medical decisions if you're incapacitated.

"Estate planning is important to anybody who cares about what happens after they die, irrespective of wealth or age," said David Ness, president of the Raymond James Trust Co., which is headquartered in St. Petersburg, Fla.

But many Americans apparently can't get over the emotions associated with death, and that stops them from putting their estates in order.

A recent Gallup Poll found that half of American adults do not have a will, the legal document in which you name the people who are to receive your property after you die. And nearly 60 percent of Americans haven't prepared a living will, which spells out the medical care you do or don't want to receive if you become incapacitated by an accident or terminal illness.

Experts say most people need two documents to deal with money and other property:

A will, which can be used to designate beneficiaries of your worldly goods as well as to name a guardian for minor children. In many states, living trusts can be used instead of wills to transfer property.

A durable power of attorney, which allows you to name someone you trust, such as your spouse, to handle your finances if you become incapacitated.

People also should consider creating two health-care directives, experts say:

A living will, which contains your desires concerning life-prolonging medical care.

A power of attorney for health care, also known as a health-care proxy, which allows you to name someone you trust to see that your medical care directives are carried out.

People who don't have a lot of assets or prefer a do-it-yourself approach will find a number of books, software programs and Web sites to help. For example, Quicken WillMaker Plus and Kiplinger's WILLPower kits help consumers through the process of document preparation. And the American Bar Association's "Tool Kit for Health Care Advance Planning" at www.abanet.org/aging and the ARRP's "Resources on End of Life, Living Wills, Dying and Death" at www.aarp.org provide guidance on health care directives.

But most people would be well-advised to seek the help of attorneys who specialize in estate preparation, said Raymond James Trust's Ness.

"In life, there are two things you should never scrimp on — a parachute and your estate planning documents," he said. "In both cases, you only use them once, and they have to work."

Robert C. Carlson, a retirement adviser and author of "The New Rules of Retirement — Strategies for a Secure Future," said that many people assume that when they die, the government will somehow divine how to distribute their property as they would have wanted.

"That's not necessarily the case," he warned. "If you're unmarried, for example, it might go to the parents or it might go to the siblings. It will depend on state law, who's alive in the family and not necessarily what you assume."