In the simplest sense, estate planning is the process of assessing your current circumstances to prepare for your future. At the same time, you'll start to take control of your finances by taking a good, hard look at what you have now and weighing that against what you'd like to own one day. Planning your estate, you'll become more aware of your finances than ever before.

Keep track of your current investments
You've probably already started investing for the long haul. You want to retire someday, and you're going to need that nest egg. You probably also want to send your kids to college, and maybe give your grandkids the same opportunity. Estate planning is partially dependent on your current worth and partially dependent on the investments you will make in the future. Keep your current investment strategy in mind as you begin planning your estate and determine what holes you need to plug.

Life insurance, for example, will adequately provide for your family in case of sudden death--so if you don't yet have it, strongly consider buying some. If, on the other hand, you will be lucky enough to live just about forever, you may need a living trust.

As you look at your financial situation you may realize that you have accumulated an estate that exceeds the federal government's estate-tax credit limit, so take some steps to leave your loved ones as much as possible and the IRS as little as possible. Beginning to give away your money now--to your friends, family and charitable organizations--will not only make you feel good, but it will also help bypass costly levies on your eventual estate.

Take inventory of your current assets and property
Start your estate plan by taking inventory of your current assets and property. Your inventory should contain the following information:

• A description and the location of each asset
• The type of ownership (individual, tenant-in-common, joint or shared) and the percentage owned
• The cost and fair market value of each asset
• Liabilities and debts
• Beneficiary designations (who is to receive retirement benefits, life insurance proceeds, annuities and similar benefits)
• Whether any assets are subject to any agreements (corporate or partnership interests)
• Whether the assets are community or separate property

A complete inventory of your property will not only prevent the headaches that can be created in locating the property after your death, but also minimize the costs that are incident to such a process.