The estate and gift tax law has been shifting and uncertain for more than 10 years, and what it will be after 2012 is uncertain. You know the deal reached at the end of 2010 is scheduled to expire Dec. 31, 2012. If Congress does nothing, we’ll revert to the 2001 law, which includes only a $1 million exemption and higher tax rates.

Some people are reacting to the uncertainty by giving away as much property as practicable. They’re using trusts, family limited partnerships, and outright gifts to take advantage of this year’s $5.12 million gift tax exemption.

Most people, however, aren’t doing anything. They figure they’ll wait until the estate tax law is settled before taking any action. That’s a mistake. You don’t know when your estate plan will be needed, and fas we’ve stressed for some time in Retirement Watch, for most people the non-tax elements of a plan are more important than the tax issues.

There are basic rules and guidelines that apply to every estate plan, whether it is taxable or not. Draft an effective plan by paying attention to these guidelines, regardless of what the tax law is or might become. You always can make adjustments if the tax law changes.

Do something. Too many people use uncertainty as an excuse not to have a plan. Some people can’t resolve issues such as who should be the executor, trustee, or guardian of their children. Some can’t decide how much to leave to charity, or perhaps the estate planner is proposing a strategy they don’t quite understand or aren’t comfortable with yet.

Don’t let these issues leave you with no estate plan or an out-of-date plan. If you can’t pull a complete plan together, at least do the minimum necessary, such as a basic will and powers of attorney. You can do an estate plan in installments. Assemble a simple, basic plan now that covers the essentials. Then, work toward a more robust plan as you learn more about the tools available, refine your goals, and resolve disagreements.

Keep track of your estate. There’s a story that W.C. Fields didn’t think banks were safe, so he diversified by stashing his money in relatively small amounts in banks all over the country. He didn’t keep a master list of the banks, and his heirs never were sure they found all the money, though they spent resources trying to track down all the accounts. Fields probably knew how to find everything, but he didn’t give anyone else all the information.

Different variations of this story occur remarkably frequently in estates of all sizes. The estate owner doesn’t have a master list or file of all the property and debts, and the files aren’t in great shape, at least not for someone who doesn’t know the system. In those cases, all the property might not be located or the estate spends a lot of time and money trying to locate it. Your estate planner also can’t deliver the best advice without an accurate list of your assets and liabilities.

At a minimum, you should update a complete list of your assets and liabilities once a year and share this with the person (or persons) named as executor in your will. And make sure your executor knows where to find all the documents to back up the financial statement. Even better is a complete list of all your key financial items, including online accounts. For help compiling a list, use my report, To My Heirs.

Estimate cash flow. Many people overlook cash flow when developing an estate plan. But the cash flow and sources of cash are important. Debts must be paid. Lawyer’s fees and other expenses will be incurred. The expenses of running and maintaining the estate’s property must be paid, and the survivors have their regular living expenses to pay. Of course, if taxes are due they must be paid with cash.

Estimate how much cash the estate will need and where it will come from. If the estate won’t have enough cash, reconsider the plan. You can sell some assets now, provide that some people will get property instead of cash, buy life insurance, or give the executor instructions on how to sell property. Many estate planners advise limiting specific cash bequests to only a few special cases.

Choose executors and trustees. Most people spend a lot of time on their plans, then select the executors and trustees as an afterthought, often automatically choosing the estate planning lawyer or oldest child as executor and the bank recommended by the lawyer as trustee. Those might or might not be the best choices for you. Unfortunately, a good estate plan can be ruined if the wrong people implement it. Give a lot of thought to who should execute your plan.

Anticipate conflicts and reduce them. Many estates have built-in conflicts that could have been resolved. For example, if kids don’t get along now, if you are always mediating their disputes, then they aren’t likely to amicably manage assets or decide how to divide them. Perhaps they should be given separate ownership of assets, different voting rights, or someone else should help make decisions about the property.

Other times the roles of an individual create conflicts. A classic conflict is when a spouse is made trustee, receives income from the trust, and the children get the trust property after the spouse dies. Often, the children end up believing that the spouse invested for maximum current income at the expense of earning capital gains for the future. Your estate plan should avoid such built-in conflicts. At best they lead to hard feelings and at worst lead to expensive litigation.

Don’t search for a perfect solution. An estate plan is a balancing act. It strikes a balance between your goals, the needs of your family, the tax law, and perhaps other factors. For example, reducing taxes often means either giving up control of property now or leaving everything to your spouse. So, there is a trade off between taxes, control, and distribution. You also have to decide whether to leave assets to your heirs directly or with some restrictions.

A good estate planner will present you with several alternative plans. Each will handle the trade offs in different ways. You choose the alternative that strikes the balance you prefer.

Don’t be a control freak. Some controls can be a good idea, such as when a beneficiary doesn’t have good judgment or experience handling a meaningful amount of money. In such cases, property should be put in a trust.

But some people go a step further and dictate in detail how wealth is and is not to be invested and distributed. There are trusts saddled with restrictions that require them to be invested in Treasury bills, gold stocks, or the stock of certain companies, to name just a few examples. Trustees, executors, and heirs need to be able to adapt to changing circumstances.

Make your general plan known. If you don’t tell heirs your plans, they will develop expectations. Feelings tend to be hurt when they are surprised after your death. That can lead to anger or bitterness that will be taken out on others in the family. Also, heirs might plan their finances with certain expectations about your estate plan and be in difficulty when their expectations aren’t realized. You should let people know generally how they’re affected by your plan. For example, if you aren’t going to treat heirs equally, will leave money to charity, or know that someone is expecting certain property, it is important to let the affected people know ahead of time.

Don’t circulate your will. While you want the general outline of your plan known among those affected, don’t circulate the will. You likely need to update it every few years, and any change in the details gives someone a reason to be upset. Also, having different versions of a will circulating over the years makes an expensive will contest more likely.

Things change. Your estate plan never is final. The property you own and the values change. The members of your family change through births, deaths, marriages, and divorces. Your goals might change. You might be inclined to leave more or less to charity or specific heirs over time. You need to meet with your planner at least every two or three years to review changes in your financial picture, family, and goals as well as the tax law.

Keep it as simple as possible. Some people and their attorneys get so wrapped up with the latest estate planning tools that they overlook simpler strategies that will accomplish their goals. Be sure complications are necessary to meet your goals before putting them in your plan.

Remember that any mistakes in your estate plan will live long after you. Follow these rules and you’ll end up with an estate plan that works well for you and your heirs.