Q: I keep hearing about the need to have an estate plan. I'm fairly young, with two small children. Isn't estate planning for those nearing retirement and advanced age?

A: Contrary to popular belief, estate planning isn't just important for the elderly; it's a necessity for people of all ages, and as a parent, it's especially crucial for you. If something unexpected were to happen to both you and your partner, who would accept responsibility for your children? Would they be able to manage financially?

Not only do you need to determine who will care for your children in the event you are unable; the people you choose must be willing to do soand it must all be documented in writing. Once this important decision has been made, then you can start thinking about your property and possessions.

Keep in mind that an estate plan is a living document. It will grow in volume as you and your family advance in life. Just as your financial planner encourages you to review and revise your financial plan on an annual basis, your estate plan should also be reviewed and revised as needed. The following 10 steps are the basics for a solid estate plan, but are by no means inclusive of the entire process. Each step is important to address at a particular stage of life.

1. Once a person reaches adulthood (18 years of age), he or she should create both financial and medical powers of attorney. Should a catastrophic illness or accident occur, these written documents designate someone to speak for that individual if they are unable to speak for themselves.

2. Upon marriage, each spouse should have, at the very least, a simple will. This protects the spouse from an enormous amount of legal issues in the event of the other's untimely death. At the time that the will is created, the powers of attorney may be transferred from the parents to the spouse, if desired.

3. At the birth of the first child, both parents should acquire a sufficient amount of life insurance to ensure their child's financial well-being in case something happens to them. "Sufficient amount" can be understood as what you anticipate it will cost to raise the child to adulthood. Plus, legal documentation must be in place to ensure that the individual(s) designated to care for the child will, in fact, be the one(s) awarded custody. As the number of children increase, so should the amount of insurance coverage.

4. As your assets increase and your children get older, a trust may be an appropriate method of preserving your assets for the benefit of your children. A trust can accomplish many things, such as keeping the estate out of probate court and providing direction as to the distribution of assets over time.

5. When you become empty nestersall children are grown and out of the houseyou may want to consider reducing the amount of life insurance coverage and investing in long-term care insurance for both you and your spouse. The cost of an assisted-living home, if it becomes necessary, is only going to increase over time. Without adequate insurance to cover those costs, you run the risk of inflicting a major financial burden on both you and your children.

6. At some point during your lives, it's essential that you discuss your end-of-life wishes and document it all in writing. No one can ensure you will live in accordance with your wishes unless you make them known when you are of sound body and mind.

7. Although it may see a little strange, prepaid funerals, burial plans, and cremations (if desired) are very common these days. Again, costs will do nothing but increase over time, and it's most likely better for everyone if you secure these details ahead of time as well as make the necessary payments. Many mortuaries offer a life insurance policy as a method of paying for final expenses. The mortuary is the beneficiary of the policy, thus ensuring that they will be paid for services rendered when the time comes.

8. Within your trust, your will should include a list of your valuable possessions and the respective recipients. This will help prevent any family turmoil when your property is being divided. Talking with your children about which possessions are important to them may also help alleviate problems later on.

9. During your lifetime, circumstances may change due to birth, death, marriage, divorce, and more. In any of these events, your plan should be reviewed and revised accordingly. Once again, this plan is a living entity, and if it is not revised as lives change, powers and possessions could fall into the wrong hands.

10. No estate plan is ever complete without communication among family members. We are all going to pass away eventually, and we must accept that fact. Part of this acceptance involves learning to communicate with others about our exact wishes. This simple, yet vital, piece of the puzzle could mean the difference between family harmony and family discord for generations to come.

Linda S. Thompson is the author of numerous books, including Planning for Tomorrow, Your Passport to a Confident Future. A professional speaker and family consultant, her areas of expertise range from caregiving to the necessity of life planning at any age. Thompson is also a member of the Alliance for Holistic Aging, the American Business Women's Association, the National Association of Baby Boomer Women, and the National Association of Women Writers. For more information, visit LifePathSolutions.