For many people, estate taxes have gone the way of buggy whips and typewriters. Estate planning may be an activity for only the super-rich.

living will

The estate tax exemption is now up to $5.34 million. With portability, a married couple can shelter up to $10.68 million of assets without forcing their heirs to share part of their inheritances with the IRS.

If you’ve been thinking along these lines, you could not be more wrong.

It is true that fewer families will be subject to the estate tax at high exemption levels. Just 10 years ago, the exemption was a comparatively paltry $1.5 million.

But taxes, while a significant consideration for those with substantial wealth, may not be the most important estate planning consideration. There are important non-tax issues you may be overlooking if you’re not paying attention to your estate plans.

Do you have a will?

Various studies estimate that more than half of Americans do not have a will. It is true that, if you die without a will, certain aspects of your financial affairs will take care of themselves.

For example, if you and your spouse own your home, bank accounts, brokerage accounts and other assets as “joint tenants with right of survivorship,” the surviving joint tenant automatically becomes the owner of the property. And assets such as retirement plans and life insurance policies include documents directing post-mortem payments to named beneficiaries.

But what about your other valuables?

Consider your ownership interest in your business, your cars, your furniture, your jewelry and collectibles. If you die intestate – without a will – the laws of your state of residence will determine who gets these items in the absence of a will.

And don’t necessarily think that the laws of your state will give everything to your surviving spouse. Most state laws of intestacy split the inheritance between the surviving spouse and the surviving children.

If you want to control who will receive your assets when you die, write down your wishes – visit your attorney and make a will. Even if you have a will, the probate court in your state of residence must approve the distribution of the assets passing under your will. Some people are concerned about the public nature of the probate process.

Do you want your friends and neighbors to be able to read your will and see a list of your assets? Others want to avoid the costs of probate.

The probate court and any administrators it appoints will take a fee. The more assets you have, the higher the fee.

Some people choose to use a “revocable living trust” as a substitute for a will to avoid the probate process. Your attorney can help you draft this document, too.

For those with younger children, perhaps the most significant reason to have a will is to name a guardian in the unlikely event you and your spouse perish in a common disaster. This decision is not one you want to leave up to the probate court.

In addition to a will, there are other important documents your attorney should draft for you. An advance healthcare directive, or living will, is important to specify the actions you want taken for your health if you are no longer able to make decisions because of illness or incapacity. Similarly, a power of attorney authorizes someone to act on your behalf in business or financial affairs.

You may be one of the diligent 50-plus percent of Americans who have put their estate plan in order and written a will. If so, how long has it been since you reviewed your will and other documents? Life events – births, deaths, marriages, divorces, retirement – can alter your circumstances significantly.

After any life event, or at least once every five years, you should dust off your estate planning documents to see if any changes are needed. In particular:

  • Review the people named as executor of your estate and guardian of your minor children. Are these people still the ones you want? Are they still capable and willing to serve?
  • Review the beneficiary designations on each of your retirement plans. Are they still current?
  • Review the beneficiary designations on your life insurance policies. If a major purpose of your life insurance is to provide funds for the care and education of your minor children, is your estate plan set up in a way to ensure that the necessary funds are available to those who will be charged with the care of your children?