A. Inventory and Valuation
The first step of estate planning is to list all of your assets and get a general idea of how much they are worth. While valuation is straightforward for most assets, it can be difficult with some assets, such as jewelry, real estate, art and copyrights. When you have little or no idea what something is worth, it may be advisable to consult a professional appraiser.

B. Determine the Beneficiaries of your Estate
The second step is to identify the beneficiaries of your estate and what property or shares you would like each of them to receive. The nature of your relationship to the beneficiaries and their needs will probably inform these decisions. This is also a good time to consider whether you are able and willing to make lifetime gifts to anyone.

C. Determine the Transfer Tax Consequences
After determining how you would like to leave your property, the third step is to understand the tax consequences of your proposed dispositions. The basic questions are: Will transfer taxes apply to my dispositions, and, if so, are there ways to reduce the taxes by altering the original plan? If the taxes can be reduced through planning, you must then balance your original wishes against the tax consequences. Generally, this is the step where consultation with a qualified professional may reap the greatest rewards.

D. The Estate Planning Documents
Once you have chosen your estate plan, it is time to prepare and execute the relevant documents to implement your plan. Again, a qualified professional may be necessary to assist you here. These documents will normally include a Will, and may also include a revocable trust (sometimes called a "living" trust). In preparing these documents, you will need to choose your executors (or "personal representatives" as they are called in some states) and, if necessary, trustees and guardians.

In addition, your estate plan may include a health care proxy – by which you appoint an agent to make medical decisions on your behalf in the event you are not able to make such decisions yourself – and/or a living will, which is a personal expression of the medical treatment you do or do not want in the event you are terminally ill. You may also wish to create a power of attorney, by which you appoint an individual as your agent to handle your financial affairs on your behalf. Depending on your family situation and assets, you may also consider creating a life insurance trust which would hold insurance on your life and/or investing in a qualified tuition program (often called a "529 plan") that allows you to provide for qualified higher education expenses of a designated beneficiary.

E. Subsequent Changes to Estate Plan
An estate plan is generally not written "in stone." Your Will in particular, and also revocable trust agreements, can and should be changed anytime that you have a change in heart or there has been a change in circumstances (i.e., marriage, birth of a child, divorce, etc.). Bear in mind, however, that some aspects of your estate plan, such as lifetime transfers, may be irrevocable once made. In addition, if you were to become mentally incompetent, you would not be able to change your estate plan. Therefore, you should revisit your estate plan every few years to make sure that the plan is consistent with your wishes.