What a Will Does and Doesn’t Do For You
A will; simply put, is a record of your final wishes. It allows you to plan for the future wellbeing of loved ones once you pass, and makes sure that there are no doubts as to how you’d like your estate distributed. As a general rule; anyone with assets should have at least a simple will in place.
Today we’re going to highlight some of the greatest benefits a will offers, as well as dispel some common misconceptions about a will’s power so you’ll have a better idea of what a will can and can’t do for you.
Outlines your desires for the distribution of your assets and property.
Take advantage of one of the most universally recognized benefits of having a will – the option to assign assets and property as you see fit.
Gives you and your family piece of mind.
Many people have had conversations with a loved one explaining exactly how they’d like their assets to be divided. The problem with conversations is they don’t truly outlive you, not the way your will does. When you take the time to record your wishes in a will, you’re removing that burden from your loved ones and you can set your own mind at ease knowing your wishes will be heard.
Can create a simple trust.
A will allows you to create a simple trust – called a testamentary trust – which is established with your passing. However, it’s important to note that if your estate is complicated, or if your desires for the assets assigned to a trust are very specific or span a period of time, it’s best to consult an estate attorney and consider setting up a living trust.
Allows you to leave assets to an existing trust.
If you’ve established a living trust; which exists separately from your will and in some cases bypasses probate, you can assign assets to the trust just as you would to any other beneficiary with a standard will.
When you have a living trust you’ll use what’s called a “pour over will” that assigns all the assets outlined in your will to the trust and then from the trust, your assets are actually distributed. This method allows you to create more complex, and even conditional, distribution assignments and with certain trusts you can even avoid probate.
Allows you to designate guardians and fiduciaries for minor children.
If you are the parent or guardian of minor children, a will allows you to name a caretaker for them as well as fiduciary to see that their financial affairs are handled. This can be either the same person, or two different people.
Allows you to name someone you trust to make sure your final wishes are carried out.
Rather than leaving the state to oversee the distribution of your assets, a will allows you to assign a person you know and trust as an executor who will oversee the handling of your affairs and distributions as outlined by your will.
Offers you a way to distribute assets to people or organizations that the state may not recognize.
For same sex couples, blended families, or people who want to leave assets to friends or organizations, a will allows you to assign beneficiaries that may not be recognized by the state should you die without a will in place.
A Will Doesn’t…
Overrule beneficiary assignments recorded in contracts and through operation of law.
We mention it a lot, because it’s so incredibly important – a will does not override beneficiary assignments or inheritance through operation of law, or title. If you have investment accounts, life insurance, or similar assets with named beneficiaries, or if you own property jointly, the contract beneficiary will be honored regardless of what you’ve stated in your will.
Don’t miss one of the most critical steps in estate planning. Update your beneficiary designations to match your will!
Guarantee your affairs won’t pass through probate.
Wills can simplify the probate process, but having a will does not mean your estate will not go through probate at all. The difference is, when you have a will someone you trust; your executor, can coordinate with the state and see that your assets are distributed the way you wished them to be.
Without a will, the state oversees the distribution of your assets, and bills your estate for the effort. Unfortunately, even with a simple estate the court fees can add up quickly.
Replace a trust.
Having a will does not replace a living trust. If you have a large or complex estate, or if you’d like to assign specific or conditional inheritance clauses – like distributing funds over a period of time or making an inheritance contingent on an event – then you will need to establish a trust.
Control property you’ve already assigned to a living trust.
If you have assets assigned to a living trust, then the designations within that trust will overrule the designations of your will. If you want to make changes to any assets controlled by a trust, you must do so through the trust.
Control payable-on-death accounts.
Payable-on-death accounts give you the ability to assign even large sums of money without needing to pass through probate. However, as is the case with contracts and any property assigned to a trust, payable-on-death accounts have designated beneficiaries that a will does not overrule.
Give you the ability to assign specific conditions or time-based distribution instructions.
As mentioned above, a will has certain limitations and in order to outline specific instructions, time-based distributions, and conditional inheritances, you’ll need a trust.
If you haven’t already created a will; or if you need to update yours, download one of our free will forms and start your estate planning today, all from the comfort of your own home.
Want to find out more about avoiding probate, or outlining specific and conditional inheritance instructions with a living trust? Consult a reputable estate attorney to learn more about the benefits and limitations based on your specific circumstances and state of residence from an expert.