With the federal estate tax exemption at a historical high of $5.34 million per person and counting, it is easy to be lulled into a false sense that estate planning is not necessary. From a non-tax perspective, it remains crucial because:

• Planning ensures that your assets pass to your intended beneficiaries.  If you don't write a will, the state will write one for you. For example, in New York, a person who dies married with children leaves half his or her estate to the spouse, the remaining 50% to the kids.  This may not be tax efficient. If your kids are under 18, their half must be held jointly with the Clerk of the Court, and the spouse will have to petition the court to get money out.  The Court may or may not grant the request in its entirety, leaving the spouse with insufficient assets to pay expenses.
• Planning ensures that your beneficiaries receive the assets in the most productive and efficient way possible (see above).  Leaving assets outright to a spouse instead of a trust can be problematic if the spouse is a second spouse with his or her own children. In that instance, he or she will likely leave the assets you left him or her to his or her children, not to your own.
• Planning designates agents to make decisions during your lifetime.  You should designate health care agents in case you cannot communicate decisions for yourself.  You should also designate agents under a power of attorney to make financial and legal decisions for you in the event that you are not able to make those decisions on your own.

Even for those people who have implemented their documents, the planning process is not over.  You should review your documents every year or so, or more frequently if there is a life change event for you or your designated beneficiaries and agents, such as death, divorce, or disability.  This will help ensure that your documents do not require updating in light of changes in the tax laws or your life circumstances. For these and other reasons. estate planning remains crucial regardless of where the estate tax laws may lie.