When you think of estate planning, a Will is usually the first thing that comes to mind. In fact, most people who contact us tell us they don’t need anything complicated for their estate- just a Will. Indeed, Wills have a reputation as the number one estate planning tool and can be seen all over TV shows and movies, from the dramatic “reading of the Will” (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.
But although Wills are a key part of your estate plan – and a big part of the movies – relying on a Will alone won’t solve your estate planning needs – no matter what Hollywood says. 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 write out 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. Because every state has different laws for the creation of a Will, it’s important to consult with an experienced estate planning attorney to create your Will rather than trying to write your own.
A Will Requires Probate Court
One of the biggest estate planning myths we 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 are actually guaranteeing that your loved ones will go to court after you die because 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 can be long and expensive. For very small estates the process may only take a couple of months, but for most estates, the process can take 6-12 months or sometimes even longer.
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
Although movies make it seem like you can and should leave all your property to your loved ones through your Will, 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.
A Will 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 instead 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 by TV shows and even some lawyers.
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.
How can that be? Well, 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.
And by using 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 backup and 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.
And, 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 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.”
This article is a service of Davidek Law Firm, PLLC. We don’t just draft documents; we ensure that families and business owners make informed and empowered decisions about life and death, for themselves and the people they love.