Why You Need More than a Will for Estate Planning
A will is a highly beneficial estate planning tool—the vast majority of estate plans will include a will. However, a will alone is not enough for you to take care of all of your affairs and guarantee all of your wishes are followed.
Here are a few reasons why you’ll need more than a will to protect yourself and your estate:
Wills must go through the probate process
Legally, wills only act as a way for you to leave behind your wishes with regard to your assets. They still must go through the probate process and be validated by a judge. While this will not be an issue most of the time, there is still always a possibility someone could challenge the validity of your will, resulting in a drawn-out, expensive probate process and preventing your chosen heirs from getting their inheritance in a timely manner. Even an average probate could cost you three to eight percent of your estate.
Wills do not shield you from taxes
If you are among the small percentage of Americans who can expect to be affected by the estate tax, a will does not offer you any protection from taxes. Only by using tools such as irrevocable trusts, gifting special types of accounts can you reduce your taxable estate.
Wills only cover your property wishes and have limitations
Wills allow you to leave behind instructions for what you would like to have happen to your property, and who you would like to be the personal representative or executor of your estate.
If you wish to leave behind instructions regarding medical care or establish power of attorney, you’ll need additional estate planning documents to accomplish this.
With regard to your property, a will only controls property that does not pass automatically to beneficiaries. Property that is automatically distributed to beneficiaries includes insurance proceeds, retirement accounts and jointly held property with rights of survivorship. Accordingly you will still need to manage your beneficiary designations on assets like retirement plans and insurance separate from you will.
Wills are generally inflexible
Once you have written and signed a will, it is set and can only be revised by revoking or destroying the original document to create a new one, or by adding a codicil, which essentially serves as an addendum to the document. There cannot be any changes made to the will upon your death, and your personal representative / executor has limited flexibility with how to carry out your instructions.
Wills have limitations regarding children
While you can use a will to name a guardian for any minor children you leave behind, you will not be able to specify your wishes on items such as education, religion or certain aspects of their upbringing. Such terms and conditions generally require a trust.
Add more flexibility to your estate plan
Avoiding probate, reducing taxes, and increasing flexibility can be done using trusts as part of your estate plan. Trusts allow you to take more control over distribution of assets and offer more direction for your chosen guardian.
For more information about wills and their importance as well as their limitations, contact an experienced estate planning attorney at Baker Law Group.
Baker Law Group offers an initial complimentary consultation.
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