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No estate plan? You are making a costly mistake

Most Americans don't have a will or trust.

For those who actually do have one, it has likely been sitting in a drawer, not updated as life circumstances have changed.

We're all guilty of not doing what may be important but doesn't seem urgent, but there's no excuse for not having a current estate plan—which will matter a great deal if you suddenly become terminally ill or incapacitated or die.

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How bad will it be if you don't have a plan?

Without an estate plan, you'll lose control over who gets your property and how it might be used; who cares for your minor children and how; and your own care, should you become incapacitated. The courts will also likely need to step in, at a potentially heavy cost—both financial and emotional—to those left to pick up the pieces.

Read MoreThink you're in the will? Guess again

If that doesn't get you running off to confer with an estate attorney, here are more details that might make you realize that coming up with a plan is an urgent matter.

Distribution of property. Without a will or trust, you won't get to choose who receives your assets, as you'll be leaving that up to your state's default plan. Your spouse might have to split your assets with your children, and if you don't have a spouse or children, then your assets will likely pass to your parents and then siblings. Even if your property would roughly get to the right people under your state's back-up estate-plan model, having the court supervise the distribution of your estate is often quite expensive and time-consuming.

Your care on incapacity. You probably want some input as to whether you'd stay in your home if you become incapacitated and how your assets would be used for your care, as well as input on important health-care decisions that might need to be made and who might make them on your behalf. Without a plan in place, the court will likely have to intervene to approve who takes care of you, and it will be involved in even the most rudimentary transactions—once again, at a heavy cost to your loved ones.

"Estate planning today is more than who gets what when; it's the key way you lay out instructions about how you want to live out what may be many years in someone else's care."

Got children? Losing control is a huge issue here because it doesn't matter if you've asked key people to be guardians. If you don't have a will, you don't get to tell the court who you think would make the best guardians for your children. Even if the right people get appointed as guardians, without a plan you've lost the ability to specify how assets are used for their benefit. Even worse, once your children reach age 18, they get complete control—and few parents think that's a good idea.

Are your kids grown? Now let's discuss people with an estate plan whose children are already of age. Even if you have a plan and your worries about guardians for your children have passed, don't you still want the right people in charge of key decisions and a plan that distributes property that reflects your reality today? Maybe you've parted ways with your named successor trustee. Maybe you need someone to manage assets that will pass to a son battling addiction or an inheritance passing to a daughter who's in a shaky marriage.

Read MoreMost clueless on parents' wishes

Keep in mind that longevity is a game-changer. Estate planning today is more than who gets what when; it's the key way you lay out instructions about how you want to live out what may be many years in someone else's care. Maybe you want more than a paragraph or two describing your desire to stay in your home if you need long-term care. Maybe you want to be clear as to how your assets are used for your care, even if that means remainder beneficiaries will inherit less. It's smart to meet with your estate attorney after any major life change—such as birth, death, marriage, divorce or change in health status—and every few years to be sure your plan conforms to any changes in the law.

Sorting the paperwork

One question that many people ask is: What exact documents make up an estate plan?

You'll need several documents to handle issues that arise on incapacity or death, which means your estate plan will likely consist of the following paperwork:

  • A will to nominate guardians for your children and lay out your wishes about how your property should be distributed upon your death.
  • A living trust to lay out your wishes regarding how property should be managed and distributed upon your death or incapacity. Property in a trust passes outside of the court and avoids probate, which is particularly important in states where the probate process is both time-consuming and expensive (e.g., California).
  • A power of attorney for financial matters to appoint individuals to make financial decisions on your behalf either now or triggered by your incapacity.
  • A health-care directive to appoint the individual(s) to make medical decisions on your behalf and to specify the type of care you want to receive, such as pain relief administered if you are terminally ill or permanently unconscious, and your preferences regarding organ donations and other final arrangements.

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Working with an estate attorney

Every family and financial situation is unique, so you should choose an estate-planning attorney who is not only knowledgeable in the laws of your state that govern probate, wills and trusts but also one in which you feel comfortable sharing your most personal details.

To prepare your plan, your attorney will ask key questions, such as: Do you want your children to inherit equally? At what age do you want your children to control their inheritance? Do you have any concerns about how certain beneficiaries might handle an inheritance? Do you want to treat beneficiaries differently? Do you want an inheritance to stay protected from creditors or spouses?

You'll also be asked who should make financial and health-care decisions on your behalf if you are unable to make them yourself, who you would want to serve as guardians for your children, and who should administer your plan on your incapacity or death.

Read MoreDon't make Uncle Sam your heir

Attorneys typically charge $3,500 to $6,000 for an estate plan. While this isn't an expense anyone wants to pay, it's far less than what your family pays to go through the courts to take care of you or distribute your assets on your incapacity or death.

—By Shannon Eusey, president of Beacon Pointe Advisors. Commie Stevens, J.D., managing director at Beacon Pointe, contributed to this article.