An estate plan can be designed by clients and their professional advisors to achieve client’s personal and financial objectives. Or, it can be an arrangement imposed upon survivors by state intestate succession laws if someone dies with¬out a valid, up-to-date will. Even though a will is most basic estate plan¬ning tool, two out of three Americans die without one.

A comprehensive estate plan can arrange ownership, management and distri¬bution of your assets in ways that meet your needs and objectives while mini¬mizing estate shrinkage. Without such a plan, whatever you may think is going to happen to your estate after you're gone probably won't.

• Estate settlement and distribution -- Estate transfer is a privilege that can be exercised only by following specific legal procedures designed to protect rights of deceased’s heirs. Estate settlement, as this process is called, involves assigned executor making an inventory of person’s business and personal assets, paying all debts and claims against your estate, identifying legal heirs of remaining estate assets, and distributing those assets accordingly.

• The problem of estate shrinkage -- The costs associated with estate settlement include funeral expenses, medical bills, legal fees, administration costs and other debts, as well as various federal or state taxes. These costs can drastically shrink size of your estate. Because they must be paid before estate can be fully settled, they can also delay distribution of your remaining assets to your heirs. • The need for estate liquidity -- Estates are often cash poor. Unless sufficient liquidity has been provided, forced sale of nonliquid assets to pay settlements costs can compound estate shrinkage. In these situations, buyer always has upper hand. But even people of modest means who never considered themselves rich enough to need much estate planning can be in for a shock. In addition to having to settle-up with Uncle Sam and state tax collectors, creditors must be paid in full before a taxpayer's heirs can receive their inheritances.