Wills have a reputation as the number one
estate planning tool, in small part thanks to Hollywood’s dramatic “reading of
the Will” scenes (which rarely happens in real life) to characters plotting how
best to defraud their billionaire uncle’s Will in order to inherit his lavish
estate.
Although Wills are a key part of your estate
plan, relying on a Will alone won’t solve your estate planning needs. Instead,
using just a Will to plan your final wishes is likely to leave your loved ones
with an expensive mess that won’t distribute your assets in the way you
intended.
What’s more, a Will alone won’t ensure that
you’re taken care of in the event of incapacity, and contrary to what you might
think, relying on only a Will actually guarantees that your family will need to go to court when you die.
If you don’t want to leave your family with a
mess if something happens to you, it's important to know how a Will works and
when it can be used to benefit you and your family.
What
Exactly Is a Will and How Does it Work?
A Will is a written document that directs how
the creator of the Will wants their possessions disposed of after their death.
The creator of the Will is called the testator
or testatrix. In your Will you can
name someone you trust to manage the distribution of your assets, called your personal representative or executor. You can also direct what you
want to have happen to your property, what charitable gifts you want to make,
and who will receive them.
A Will can be a complex document or a very
simple document. With that said, a Will isn’t a legally binding document unless
it’s executed according to the laws of the state where you reside. In general,
you need to sign your will in front of a witness, and sometimes a notary. Every
state has different laws for the creation of a Will, it’s important to consult
with an experienced estate planning attorney (like me) to create your Will
rather than trying to write your own.
A Will
Requires Probate Court
One of the biggest estate planning myths I
hear from clients is the belief that by having a Will, their loved ones won’t
need to go to court after they die.
This is sadly the opposite of the truth.
If you
use only a Will as your main method of estate planning, you actually guarantee that your loved ones will go
to court after you die. A Will is required by law to
go through the court system called probate before any of your assets can be
distributed. In fact, a will is only
effective within the probate court.
Once your Will is admitted to the court after
your death, your personal representative or executor will be given official
authority to move your assets under the court’s supervision. This ensures your
property is distributed according to your wishes and that the court can
intervene if there are any disputes over who gets what.
While court oversight can be helpful if there
is any confusion or disagreement about your estate, the probate process is long
and expensive. Depending on your state, the process can take about 6 months for
small estates, or 12 - 18 months (sometimes even longer) for most estates.
Due to
the length and complexity of the process, going through probate can easily cost
your family tens of thousands of dollars. Some states
even require that probate cost a
certain percentage of your estate’s value.
In addition, because probate is a public court
proceeding, your Will becomes part of the public record upon your death,
allowing everyone to see the contents of your estate, who your beneficiaries
are, and what they’ll receive. Unfortunately, it’s not uncommon for scammers to
use this information to try to take advantage of young or vulnerable
beneficiaries who just inherited money from you.
A Will
Does Not Apply to All of Your Assets or All of Your Needs
A Will actually only covers certain items of
your property, including any property owned solely in your name and any
property that doesn’t have a beneficiary designation. It does not cover
property co-owned by you with others listed as joint tenants or owned as
marital property, meaning you can only give away your share of any property you
own with others, not the entire property.
Any assets that have a beneficiary
designation, like retirement accounts or life insurance, are not controlled by
your Will at all, but will be paid out to the person listed as your beneficiary
on each account. Because of this, it’s especially important to make sure your
account beneficiaries are up to date.
In addition, a Will has no power until you
die, so you can’t use it to give someone you trust the power to make decisions
for you if you’re incapacitated due to illness or injury. Even if you named
someone in your Will to manage your estate or watch over your children, that
person will have no authority to do so while you’re alive.
Don’t
Just Get a Will, Get an Estate Plan
With all the issues that using a Will for
estate planning can create, you might be wondering why a Will is even used at
all. The thing is, a Will isn’t the one-and-done solution that most people are
led to believe.
Instead,
a Will should be used as a piece of
your overall estate plan, not as the entire plan itself. And ideally, your
Will shouldn’t even need to be used at all.
An estate plan isn’t just one or two documents
- it’s a range of tools and coordinated planning that makes sure everything and
everyone you love is taken care of.
By using better tools like a Trust instead of
a Will as your main tool for estate planning, you can direct what happens to
your property while avoiding probate court entirely and ensuring the people you
trust can step in and manage your assets immediately if you become
incapacitated because of an illness or injury. In addition, any assets you put
in the name of your Trust are entirely private, meaning the court and the
public will never know what you own or who will inherit it after you’re gone.
When using a Trust-based estate plan, you’ll
still have a Will, but your Will should only need to serve as a safety net to
make sure that any assets that are accidentally left out of your Trust at your
death are added back into your Trust.
Even more important than both a Will and a
Trust, is an inventory of your assets so your family knows what you have, where
it is, and how to find it when you become incapacitated or die. Without an
inventory of your assets, your family will be literally lost when something
happens to you. A comprehensive inventory updated throughout your lifetime is a
critical, and often overlooked, piece of an estate plan that is not “just a
Will”.
If you’re ready to see how having an estate
plan for your family is different than having “just a Will,” contact us today. We’ll
review an inventory of everything you have and everyone you love, and together
look at what would happen to your possessions and loved ones when something
does happen. Then, I’ll help you develop
a plan to make sure your loved ones are taken care of when you can’t be there
and that your plan works for you, and for them, exactly as you want it - at
your budget and within your desires. Most importantly, I don’t just create
documents - I guide you and your family through every step of the process, now
and at the time of your passing.
To get clear on what you really do need for
yourself and the people you love, schedule your complimentary 15-minuteconsultation today.
This article is a service of Ganvir Law, Personal Family Lawyer®. We do not just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That's why we offer a Family Wealth Planning Session™, during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article.
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