Carrie Schwab Pomerantz

Dear Carrie, My husband and I are in our early 40s with two young kids. We know we should have some sort of estate plan, but it seems like such a chore. Any way to keep it simple? --A Reader 

Dear Reader, You're certainly not alone in putting off estate planning. On top of our understandable aversion to facing our own mortality, estate planning conjures up images of mind-boggling detail, long hours with an attorney and high cost. But for most people, creating a basic estate plan can be pretty simple in terms of paperwork. The hard part comes in forcing ourselves to do the upfront thinking and get organized.

On the bright side, this thinking and organization is something we all should do periodically anyway. Plus, an estate plan isn't only about money; it's about protecting your kids and each other. So it really is worth the time and a bit of effort

Start with your financial situation

Many people think an estate plan is only for the wealthy. But just because you're not worth millions doesn't mean you shouldn't protect what you have. Now is a good time for you and your husband to take financial inventory. Add up what you own, such as a home, business, bank accounts, investment and retirement accounts and life insurance.

Now subtract what you owe to get an idea of your net worth. You might be surprised at the value of what you have -- and therefore motivated to make sure it passes properly to your heirs. Even if it's simply to each other and your kids, why not make it easier on yourselves and your children if the unexpected occurs?

Agree on the personal decisions 

How you distribute your assets is only one part of estate planning. Equally, if not more important, is designating a guardian for your children. If you don't, the state will. You also should think about your preferences for health care if you become incapacitated, and appoint someone to communicate your wishes. Plus, you'll need someone to make financial decisions.

It's a good idea to contact the people you have in mind. All of these positions involve a lot of responsibility. Make sure the people you choose are willing and able to handle it.

Prepare three basic documents 

Once you know what you want to do, the paperwork can be fairly easy. I always advise consulting with an estate-planning attorney, but if your finances are straightforward, your estate plan will likely be as well. You'll need:

Carrie Schwab Pomerantz

Carrie Schwab Pomerantz is a Motley Fool contributor.

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