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Where there's a will, there's a way

Estate planning is not just for the rich.

If you don't make arrangements for what will happen after you are gone, the government will step in and make all those decisions for you—and they may not be the decisions you'd choose. The process will also be more difficult and costly for your family, so it's important to do it yourself while you still can.

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The most basic estate-planning document is your will. This is where you leave instructions on who should handle your affairs—and how they should be managed—after you are gone. Although it may sometimes be possible to make arrangements that get around the need for a will, it is a good idea to have one anyway, just to be sure that you have covered everything.

Clients often ask if they have to go to a lawyer to prepare their wills. While even a scribbled note is better than nothing, the answer is yes, you do need to go to a lawyer. Although downloadable forms are available online, a lawyer will make sure that you have addressed every concern. A good trusts and estates lawyer will also be able to point out problems and pitfalls that you may not be aware of.

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One of the most important parts of any will is the designation of a guardian for young children in the event both parents die before a child turns 18. Both parents may not see eye to eye on this matter, and these discussions are often difficult, but while the chances of this happening are slim, the consequences of not documenting a guardian are great. Informal arrangements don't count for much, and a judge can appoint anyone—relative or not—that they deem appropriate.

I have personally seen it happen: When two married friends died in a plane crash, leaving behind a young daughter, both of their extended families immediately came forward.

They were all good people focused on nothing more than what was best for this little girl, but they didn't agree on what that was. And so the squabbling began.

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Fortunately, it turned out that the couple had, in fact, signed their wills before leaving on their trip, and the documents named the wife's brother as legal guardian to their daughter. Once that fact became common knowledge, the arguing stopped and everyone fell into line. From that point on, they all knew what to do.

If you have young children, you absolutely must address this issue in your own will. Even if you and your spouse have trouble reaching an agreement, leaving it to the courts and warring relatives would be a worse scenario.

"How do you find a good estate-planning attorney? . . . I suggest getting recommendations from people you respect and trust."

Your plans might also include providing for a trust. Trusts come in two varieties—revocable and irrevocable—and yes, both require an attorney. A revocable trust is one you set up when you are alive and that you can cancel, revoke or change any time you want to.

A revocable trust can be used to help manage your affairs while you are alive and distribute assets when you are gone. They tend to be popular in some states but less useful in others.

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An irrevocable trust generally cannot be changed once it is set up. It can be created either while you are still alive or later, through your will. Irrevocable trusts can offer transfer tax, creditor protection and management advantages but also can have significant drawbacks. Since these trusts are, true to their name, irrevocable, it is very important to get good legal advice if you are thinking about creating one.

Everyone over the age of 18 should have a health-care proxy—a legal document designating someone to make health-care decisions for you if you are not able to. We used to think of these only for the elderly—until, that is, the Virginia Tech shootings of 2007, when parents of unconscious victims were excluded by medical privacy laws from being involved in critical medical decisions.

Older or younger, we all need to have a health-care proxy. These forms can be prepared by an attorney but are also commonly available online and via health-care providers.

So how do you find a good estate-planning attorney? While the Web provides many search opportunities, I suggest getting recommendations from people you respect and trust. You can also check with your local bar association for a listing of estate-planning attorneys in your area. You don't need the most high-priced, sophisticated attorney, but you don't want someone who "also does wills," either.

Instead, seek a lawyer who specializes in wills and does this routinely.

—By David Mendels, Special to CNBC.com. David Mendels is a certified financial planner and director of planning for Creative Financial Concepts in New York.

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