With a will, there's a way to determine sharing with heirs

So you haven't made out a will, and you're not inclined to do it tomorrow. You have lots of company: 2 out of 3 American adults. And you have elite company: Abraham Lincoln, Andrew Johnson, Ulysses S. Grant, and James Garfield did not leave wills.

But if you follow such presidential examples, you give up the right to choose your heirs. The state can divide up your property along a set chain of inheritance: first the spouse and children, then parents, then brothers and sisters, and finally other relatives such as cousins, nieces, and nephews. You give up the right to change the order and proportions, include friends, or specify certain gifts for certain people.

Also, you could not designate the guardian for your children. And if the government administers the estate because you haven't chosen an executor, the costs can be high and unnecessary -- costs ultimately paid for by the heirs.

A will does not have to be steeped in legal terminology. This document, for example, passed muster in Pennsylvania in 1924: ``. . . if enny thing happens all . . . [money bonds, saving stamps, and home] goes to George Darl & Irvin Kepp this letter lock it up it may help you out.'' It was signed ``Father.''

When should you make out a will? C. Peter Gossels, a lawyer in Boston, says it should be done as soon as you reach majority age (18 in most states). Even if you don't consider yourself wealthy, you may still want to have a say in what happens to your furniture, jewelry, or money in a checking account.

On the other hand, Dorothea Kaplan, a lawyer and the founder of Law Lab Inc., a legal self-help firm in Chicago, says there's no need to go through the process until you have a certain amount in assets. In Illinois, she says, if the assets that need to be included in your will are worth less than $15,000, the case does not go to probate court. Your property would automatically go to the next of kin. The amount varies among states, ranging from $10,000 to $25,000.

Let's say you've decided to go ahead and make a will. Should you use a lawyer or write your own? According to M. Dale Bizzi, a personal financial planner at State Street Bank in Boston, ``You should do your own will when you are a lawyer with experience in estate planning. The law is very complex.''

But John C. Howell, a lawyer and author of ``How to Write Your Own Will,'' says that the ``vast majority'' of people who don't have a taxable estate can write their own will unless they have some kind of legal entanglement (divorce or ownership disputes, for example). Any estate valued at less than $400,000 in 1985, $500,000 in '86, or $600,000 in '87 is not federally taxed. In 24 states, there are no state inheritance taxes, and Maine and Oregon are to phase theirs out by 1987.

To see if your estate will be federally taxed, roughly figure out your net worth. Count the assets usually included in your will: cash, individual checking- and savings-account balances, certificates of deposit, mutual funds, government securities, life insurance to the estate, stocks, bonds, money owed to you, a share in a business, automobile(s), household furnishings, jewelry, art, and antiques. Add to that the assets that would automatically be passed on: joint checking- and savings-account balances, jointly owned property, trusts, life insurance to a specific beneficiary, an individual retirement account, pension or retirement benefits. Then subtract your liabilities, such as mortgage balance, loan balance(s), charge-account and credit-card balances, and taxes owed.

If you expect your estate to be over the federal tax exemption limit, says Ms. Kaplan, it is probably worth going to a lawyer. But that can be expensive. Expect to pay between $150 and $900 for a simple will with no contingencies, up to thousands of dollars for comprehensive estate planning.

Mr. Howell cautions against going to lawyers who charge less than $100. They cannot possibly be making a profit on the account, and may not do the best job. Also, they are probably using the service as a loss leader and may want to be named your executor -- the one who inventories the property, pays the debts and taxes, distributes property according to the will, and submits a final accounting to the heirs and, in some states, to probate court.

Howell says the statutory fees for lawyers range from 3 percent (for large estates) to about 12 percent of the value of the estate. In 1977, for example, the average fee for taxable estates was $12,000. One cheaper but still safe option is to write a draft and have a lawyer look it over. To do so, you need to include the following ideas:

1. Write the will. Start out with an introductory paragraph identifying yourself. State that this document is a will that revokes all previous wills.

2. Name the executor, stating that he or she has the right to dispose of your property. If you appoint someone other than a lawyer, you should include a statement waiving the bond (often 1 percent of the value of the estate), which is meant to ensure the executor doesn't take off with the inheritance. Almost no bonding insurance company will put up the bond for a nonlawyer, says Kaplan. And if possible, choose someone from your state; otherwise a lawyer from within the state will need to appear in probate court.

3. Designate which gifts (including general gifts such as money) go to which people, describing each gift in detail.

4. In the residuary clause, divide the property you haven't specifically mentioned in your will. The latter should be done in percentages, since you cannot know exactly what your estate is worth.

5. Name a guardian for your children. If your estate is large, you may want to appoint a personal guardian to raise the children and a property guardian to manage the finances. You can include a phrase waiving the bond a guardian must post, too.

A few final caveats from Kaplan: If you do write your own will, be sure to sign the will before witnesses (either two or three people, depending on the state). Any later changes must also be witnessed, and often a new will must be drawn up, with the previous one destroyed. Finally, do not put it in a safe deposit box, since it could require a court order to open it.

The easiest approach is probably the generic, fill-in-the-blank will. While only California, Wisconsin, and Maine have formally approved standardized forms, the forms usually stand up in other states as well. You can find them in most stationery stores or in self-help books such as ``How to Avoid Probate,'' by Norman Dacy, or ``It's Easy to Avoid Probate,'' by Barbara Stock.