The year 2000 marks another milestone on the march of the baby-boom generation to and through middle age. The leading edge of the generation will turn 54 this year, and the hindmost will turn 36.

The boomers are at or near their peak earning years, building careers, houses, families--and estates--that's estates as in estate tax, not as in Tara or Sunnybrook Farm.

So it's time for those boomers who have not already done so to add to their New Year's resolutions a vow to have in place a proper estate plan before another year rolls by.

The term "estate planning" has a sort of high-roller tone about it--and of course it's very important to the wealthy--but it's also something families of modest means should take care of.

For these folks taxes may not be much of an issue, but they, as much as anyone, want to make sure that their possessions are distributed as they wish, that any young children will be taken care of, and that survivors will be spared as much as possible the headaches of administering an estate.

Year-end is a convenient time to take stock of your financial situation generally, since you are going to have to start compiling income and other records to do your taxes. Planners often recommend that families also take this time to check on where they stand relative to goals such as college tuition and retirement. That's a useful exercise, and also one that fits nicely into the beginning of an estate plan.

Since estate planning is, essentially, deciding what you want to happen to your property when you die, the obvious first step is to figure out how much property you've got. And since taxes can be quite high if you're lucky enough to have a lot of property, you want to know what it's all worth. Be sure to include partial interests, such as a house you own with your spouse or a tract of land with a sibling.

What you'll be doing is more than a simple inventory. You'll be calculating your net worth--listing your assets, assigning value to them, subtracting debts and arriving at an overall figure.

You may be surprised at the size of this number. Families who have owned a home for a while and have some life insurance and maybe a mutual fund or two can easily find themselves at a level where estate taxes are a problem, even though their income may make them feel they are barely middle class.

Estate tax rates can reach 55 percent, so they are a serious concern to those subject to them.

There are ways to ease the tax burden, which we'll come to in a minute, but before that you should make sure you have that most basic of estate planning tools, a will.

A will takes care of non-property issues, such as who gets custody of the kids if both parents die.

And it allows you to make specific bequests of cash or other property that may be difficult to do with a trust or other planning device. In your will you can direct that your son gets your grandfather's watch or that your daughter gets the sterling tea service.

Your will also backstops other devices. For example, you may have set up trusts to hold your property, but forgotten to re-title something, or you may have a newly acquired item that isn't in the trust when you die. Your will can direct its disposition.

For people of modest means, a will may be adequate to cover most issues. Assets under a will do go through probate, a legal process nominally designed to protect heirs, but which can be a headache. But many states, including those in the D.C. area, have greatly simplified probate, so going through it is not the hassle and expense it once was.

Still, having assets pass outside probate has advantages. For small estates, titling assets jointly, thus allowing them to pass to the survivor automatically, can be a useful device. Some states also allow something called tenancy by the entirety. This is like joint tenancy but is available only to husbands and wives and provides additional protection from creditors.

A more complicated but increasingly popular estate-planning device is the revocable trust, sometimes known as the living trust. With these, a trust is set up and assets are assigned to it. The original owner and someone else, such as a spouse, are trustees and have full use of and access to the assets.

Such trusts have many advantages. If you as creator of the trust become incapacitated, your co-trustee can manage the assets. Assets in trust do not go through probate, and the trust can be set up to continue after your death, so that your spouse can have access to them if needed, but at your spouse's death they can be distributed to other heirs without passing through another taxable estate.

Trust arrangements are often used to reduce estate taxes. Everyone is entitled to a credit that allows estates of up to $675,000 to escape federal estate taxes. (That exemption rises to $1 million in 2006.) In addition, a spouse can leave an unlimited amount to a surviving spouse free of tax.

If one spouse dies and simply leaves everything to the other spouse, however, there is no tax at that point but the first spouse's credit evaporates. Thus, at the second spouse's death, only his or her credit is available, so that only $675,000 can pass untaxed to the heirs, rather than the $1.35 million that would go untaxed if both credits were used.

Couples whose assets exceed those limits, or are likely to in the future, can benefit from setting up a pair of revocable trusts, dividing their assets and placing them into those trusts. At the first death, the deceased's assets go to the deceased's trust and qualify for the credit. The trust is drafted so the surviving spouse has access to the income and principal if necessary, but otherwise the assets remain there and are distributed to the heirs later on.

A different kind of trust is sometimes used to avoid estate taxes on life insurance.

An irrevocable trust is set up and funded by the gifts from the older generation. It owns a life insurance policy and pays premiums on it. At death, the policy is not part of the estate because the deceased didn't own it, and the proceeds can go to heirs or be used to pay estate taxes on other assets.

Finally, federal gift tax law exempts gifts of up to $10,000 ($20,000 for a married couple) a year, allowing families to give cash or other assets to younger members. Over the years, a systematic program of giving can transfer a lot of wealth across generations without any estate or gift tax.

And people can pay tuition or medical expenses for others without limit--clearing the way for grandparents to pay prep school or college tuition without tax.

Libraries and bookstores are full of books on estate planning, and many make useful reading for background. In practice, however, estate planning, even if it's only a simple will, is best done in consultation with a lawyer or other expert. Most families don't need very complicated estate plans, but it's still important to get all the details taken care of.

And any estate plan should be reviewed regularly. Circumstances change--marriages and divorces take place, babies are born, people die, assets change value, sometimes laws get rewritten--and the estate plan should be adjusted accordingly.