If you don't have a will, now's the time to make one.
The U.S. Senate has been fiddling over the federal estate tax for the last year. Because they have been unable to act, the existing estate tax expired. This year there is no estate tax, but next year the estate tax is scheduled to revert to the pre-2001 level -- a whopping 55 percent rate with a $1 million exemption.
Whether you are retirement age or much younger, this estate tax uncertainty makes it especially important to have a will. Otherwise, you could be giving lots more to the government than you have to. Even if you're not a millionaire, dying without a will is messy and could leave your loved ones in a bad situation.
For some people, even talking about this aspect of retirement planning is tough. My father-in-law, who lived many years in retirement, died about a year ago. He didn't have a will and my mother-in-law is still sorting it all out.
They knew not having a will would be a problem, but my father-in-law couldn't even bring himself to discuss the issue let alone do anything about it. So the inevitable happened.
Dying intestate -- without a will or a living trust -- means that your money and other assets will be divvied up according to the law in the state where you live. In some states, that means your surviving spouse may not get all the assets because the law will give any children some of the money. And even if there are no children, a cut may go to the deceased spouse's parents, their brothers and sisters and maybe their nieces and nephews. If you've not been on top of changing beneficiaries, the 401(k) that you left where you used to work could be going to your ex-spouse.
If you are an unmarried couple, it is especially important to make a will. Only a half-dozen states recognize common-law marriages and only Iowa recognizes common-law, same-sex domestic partnerships.
Even if you live in a state that gives everything to the surviving spouse, my mother-in-law found that not having that piece of paper makes each transaction more difficult than it needs to be. So for the sake of the people you love, take care of this retirement planning detail right away.