NEW YORK (CNNfn) - Many people put off drafting a will, perhaps because they don't like to think about the circumstances when they need one.
But as soon as you have more assets than you had in college, you'll want to think about writing one, financial advisers say.
"Never too early to start," said Avery Neumark, a lawyer and accountant in New York City. "Anything can happen at any time."
Still, only 40 percent of Americans have a will, according to the American Bar Foundation. That rises to 70 percent for people over 55, but those people who don't plan for their deaths ahead of time short change those they leave behind, financial planners say.
"Most people think about it when they get married," said Robert Tull, a certified financial planner in Chesapeake, Va. Like most financial planners, he believes the majority of Americans need a will, even just to deal with basic possessions like a car and clothing and particularly any investments. "If you have assets, you really need a will."
You might not get what you want
If you die intestate, or without a will, the state you live in divides up your assets following a set formula. That varies depending on where you live, but state law normally allocates your assets to your spouse and children, then parents or other relatives that survive you.
"You have a will, it's just that the state writes it for you," Carol Harrington, an attorney who works on estate planning with McDermott, Will & Emery in Chicago.
Illinois splits half an intestate person's assets to their surviving spouse and half divided among any children, for instance. Some states leave a third to the spouse and two-thirds for children.
"I don't think I've ever had anybody walk into my office and say 'I want half to go to my spouse and half to my children,'" Harrington said.
Wills let people allocate their assets more specifically. They can also appoint a personal representative, or executor. If you don't have a will, the court appoints the executor, and in most states they have to put up a surety bond, a cost that can be avoided.
Choosing an executor ahead of time means you don't burden your survivors with suddenly making that decision when you die. "The last thing you should do is leave the people you care about with a mess," said Phil Cook, a financial planner in Torrance, Calif.
Besides landing loved ones with the surprise of overseeing their estate, people who die without wills typically have higher court and attorneys' costs.
Wills are vital if you have small kids
If you have minor children, a will also allows you to stipulate who their guardian will be, appoint a financial guardian such as a bank, and decide when children will be entitled to inherit your assets.
"It's kind of a personal decision, who's going to look after your children, and not something you'd leave up to the state," Harrington said. Children from previous marriages are particularly likely to get overlooked if you don't provide for them in a will.
And though people may want to leave most of their possessions to their spouse and then their kids, writing a will lets people plan for unusual circumstances.
"The biggest problem people have is thinking of all the possible orders of death," Harrington said. He said that among the possibilities is "'What happens if my child dies before me?' "
But people without kids also need to plan ahead. Many people think owning property in joint tenancy means they don't need a will, because assets such as a house held that way transfers directly to the other owner, normally a spouse. Assets covered by contract, with direct beneficiaries such as life insurance and pension plans, are distributed before a will goes into effect.
But joint tenancy and assets that nominate a beneficiary don't dictate what happens if both people die at once -- say, in an accident -- or too close to each other to change their financial planning.
Leaving everything to joint tenancy is dangerous, Harrington said, because laws also vary according to the kind of asset. It's easy to remove a child from joint tenancy of a bank account, for instance, but you need permission to remove someone from joint tenancy of property such as a house.
It's possible to go it alone
If you're single and don't have much in the way of assets, you might consider writing your own will. The American Bar Association puts out The American Bar Association Guide to Wills and Estates and has order information online.
Financial publisher Nolo.com offers a primer on estate planning and two books on writing your own will, the Quick and Legal Will Book and the more-extensive Nolo's Will Book. It also sells will writing software for do-it-yourselfers, WillMaker, for $34.98.
If your wishes are pretty simple, you can probably write your own will, according to Denis Clifford, who wrote the Nolo books. Many people can. "The subject has been needlessly terrified and mystified by lawyers," he said. A single person or a couple that wants to leave their possessions to each other and then their kids could do it alone, he said.
But for more complicated issues, go to a lawyer. That's what Tull advises his clients to do. Negotiate a flat rate, he suggests, which will vary on where you live.
Tull says a garden-variety will costs about $200 in Chesapeake, the city of about 200,000 people where he is based. But in bigger cities or for complicated planning it may well cost $1,000 or more.
To save time, draw up a list of how you want your estate divided ahead of time, Tull recommends."The hardest thing is deciding who gets what," he said.
Allocate your assets by percentages rather than in dollar figures, he says, because the dollar value of your estate will change. Make sure you have a chance to review the will over the kitchen table before you sign it, he suggests.
Get powers of attorney, too
A lawyer should include two other important documents, a financial power of attorney and a medical power of attorney. They let you stipulate who makes decisions about your money and your health care if you're incapacitated or unable to run your affairs yourself -- for reasons including coma and Alzheimer's disease.
"If they don't suggest that, I would wonder about their competence," said Charlie Sabatino, assistant director of the ABA's Commission on Legal Problems of the Elderly. People are living longer and more likely to need those documents as well as a will.
Living trusts and other will substitutes are also increasingly popular. Those can cut down on the probate costs involved in executing a will, but they're more expensive to set up. Many people set up trusts and never fund them, Sabatino says. For most middle-class Americans, they're probably not necessary, he thinks.
"The more property there is, the more likely a trust is going to be useful," he said. Federal estate taxes go into effect if the estate is worth more than $650,000, so anyone nearing that dollar value of assets ought to get estate-planning advice, he said.
The cost of setting up wills and trusts pays off quickly if your beneficiaries save on taxes after you die. "It's well worth the fee because you save so much in estate planning if you do it right," Neumark, who works for Rosen, Seymour, Shapss Martin & Co., said.
Your will is something you'd likely want to review regularly, he and other estate planners say, particularly if you have a major change in your life -- such as a divorce or a significant increase in your assets. Even if you don't think much has changed, it's probably worth looking over your will once in a while -- say every three to five years, McDermott, Will & Emery's Harrington advises.
"Most people do their wills many times in their lifetimes," she said. "Things change even when you don't think they're changing."