Whenever the topic of estate planning comes up, people invariably mention creating a will. And with good reason. Having a will is a foundational aspect of your estate plan.
However, depending upon your circumstances, a will may be just one part of effective planning. For instance, if your plan consists of a will alone, you’re guaranteeing your family will go to court when you die. In other words, “Where there’s a will, there’s a probate.”
Based on my experience, a primary goal of estate planning for you may be to keep your family out of court and out of conflict, no matter what happens to you. Yet with only a will in place, your plan would fall short of that goal.
Here’s why having just a will may not be enough:
Should you become incapacitated with only a will in place, your family likely would have to petition the court to appoint a guardian or conservator to manage your affairs.
While you may think having a will allows your loved ones to inherit your assets without court intervention, this is not true. For your assets to be legally transferred to your beneficiaries, excepting very small estates, your will must first pass through the court process called probate.
Probate is public, so anyone can find out the value and contents of your estate. They can also learn what and how much your family members inherit, potentially making them tempting targets for frauds and scammers.
Passing on your assets using a will could leave those assets vulnerable to several potential threats. If your will distributes your assets to your beneficiaries outright, those assets are not only subject to claims made by a beneficiary’s creditors, they are also vulnerable to lawsuits and divorce settlements the beneficiary may be involved in.
And if assets left via a will pass to beneficiaries without any conditions, those assets are susceptible to the beneficiary’s own poor judgment. For instance, a sudden windfall of cash could cause serious problems for someone with poor money-management abilities and/or addiction issues.
Some assets can’t be included in a will. For example, a will only covers assets or property owned solely in your name. It does not cover property co-owned by you with others listed as joint tenants, nor does a will cover assets that pass directly to a beneficiary by contract, such as a life insurance policy or retirement account.
Though a will is an integral part of your estate plan, it is not enough by itself. Instead, wills are often combined with other planning vehicles, such as powers of attorney and other documents needed in the event of incapacity. Will also may be combined with living trusts, to provide a level of protection against some of the pitfalls mentioned above. And here’s the thing: If your plan is incomplete, it’s your family that suffers, having to clean it all up when you’re incapacitated or after you are gone.
That’s why, especially when it comes to estate planning, you’ll want to work with a lawyer who will help you to make educated and empowered decisions about what’s truly best for your unique circumstances.
This article is a service of Beverly R. Davidek. I don’t just draft documents; I ensure that families and business owners make informed and empowered decisions about life and death, for themselves and the people they love.