Estate Planning

Why “Just a Will” Is Never Enough

When you think of estate planning, a Will is usually the first thing that comes to mind. In fact, most people who contact me tell me 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. You can even write your Will on a napkin if you really want to!

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.

Some states have laws that allow you to create a Will that isn’t witnessed at all so long as it is handwritten by the testator themselves. But because 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 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 is long and expensive. For very small estates the process may take about 6 months, but for most estates, the process can take 12 - 18 months or sometimes even more.

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 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 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 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,” schedule your Family Wealth Planning Session™ today. During the session, 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. I even help all of my clients pass on something more valuable than their money - their values, stories, and wisdom - through a Family Legacy Interview.

This article is a service of a Personal Family Lawyer® Firm. We don’t 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.

The content is sourced from Personal Family Lawyer® for use by Personal Family Lawyer® firms, a source believed to be providing accurate information. This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal, or investment advice. If you are seeking legal advice specific to your needs, such advice services must be obtained on your own separate from this educational material.

Proper estate planning can keep your family out of conflict, out of court, and out of the public eye. If you’re ready to create a comprehensive estate plan, contact us to schedule your Family Wealth Planning Session. Even if you already have a plan in place, we will review it and help you bring it up to date to avoid heartache for your family. Schedule online today.

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Estate Planning

Just Married? 6 Estate Planning Essentials for Newlyweds—Part 2

As we head into the peak of wedding season, if you are a newlywed or are about to tie the knot, add “estate planning” to your do list. And yes, we imagine that at this happiest time of your life, planning for your potential incapacity and eventual death is probably the farthest thing from your mind, but getting it handled as part of your wedding planning is the greatest gift you can give your soon-to-be spouse.

First, be aware of the impact of doing nothing. If you were to become hospitalized for any reason prior to your wedding day, the person you love most in the world would not have the legal authority to make your medical decisions and may not even have the authority to see you in the hospital. Your beloved would have no access to your bank accounts and could even be put into a position of having to move out of your shared home abruptly in the event of your death.

Indeed, once your marriage is official, your relationship becomes entirely different from both a legal and financial perspective. With this in mind, last week in part one, we discussed the first three of six essential items you need to address in your plan, and here we cover the final three.

4. Durable Financial Power of Attorney

As we touched on last week in part one, estate planning is not just about planning for what happens when you die. It is equally important—if not even more so—to plan for your potential incapacity due to a serious accident or illness.

If you become incapacitated and have not legally named someone to handle your financial and legal interests, your spouse would have to petition the court to be appointed as your guardian or conservator to handle your affairs. Though your spouse would typically be given priority, this is not always the case, and the court could choose someone else.

And the person the court appoints could be a family member you would never want having control over your life, or it could even be a crooked professional guardian, who would charge exorbitant fees, keep you isolated from your family, and sell off your assets for their own benefit. In any case, if you have not chosen someone to make your financial and legal decisions in the event of your incapacity, the court will choose for you.

To ensure your spouse has the ability to make these decisions, you should create a power of attorney documents to give him or her this legal authority. You actually need two of these documents, and the first one is a durable financial power of attorney. A durable financial power of attorney would grant your spouse the immediate authority to manage your financial, legal, and business affairs in the event of your incapacity.

With a durable financial power of attorney, your spouse would have a broad range of powers to handle things like paying your bills and taxes, running your business, collecting government benefits, and selling your home, as well as managing your banking and investment accounts. Granting durable financial power of attorney is especially important if you live together before you get married because, without it, the person named by the court could legally force your soon-to-be spouse out with little to no notice, leaving your beloved homeless.

The second document you will need is a medical power of attorney, which we will discuss next.

5. Medical Power of Attorney and Living Will

In addition to the durable financial power of attorney, you will also need to create a medical power of attorney. A medical power of attorney is an advance healthcare directive that would give your spouse (or someone else) the immediate legal authority to make decisions about your healthcare and medical treatment should you become incapacitated and unable to make those decisions for yourself.

For example, a medical power of attorney would allow your spouse to make decisions about your medical treatment if you are in a serious car accident or hospitalized with a debilitating illness. Without a medical power of attorney in place, your spouse would have to petition the court to become your legal guardian.

As we discussed last week, even though your spouse is generally the court’s first choice for guardian, you should spare your spouse the time, money, and trauma involved with the guardianship process by creating a medical power of attorney and naming him or her as your agent.

While a medical power of attorney allows your spouse to make healthcare decisions on your behalf during your incapacity, a living will is an advance directive that explains how you would want your medical care handled, particularly at the end of life. A medical power of attorney and a living will work closely together, and for this reason, they are sometimes combined into a single document.

Within the terms of your living will, you can spell out things, such as if and when you would want life support removed should you ever require it, whether you would want hydration and nutrition supplied, and even what kind of food you want and who can visit you in the hospital.

One tragic example of just how nightmarish things can become in the event you are incapacitated without advance directives in place is the case of Florida’s Terry Schiavo, who spent 15 years in a vegetative state after suffering a heart attack at age 26. Because she had neither a medical power of attorney nor a living will Schiavo’s young husband fought her parents in court for years for permission to remove her from life support, and the resulting litigation made news headlines around the world and exposed a deep divide among Americans over the right-to-die movement.

6. Name Legal Guardians For Your Minor Children

If either you or your spouse has minor children from a prior relationship, or if you are planning to have kids of your own soon, it is imperative that you select and legally document long-term guardians for your children. Guardians are people legally named to care for your children in the event something should happen to you and your spouse.

And do not assume that just because you have named godparents or have grandparents living nearby that is enough. You must name guardians in a legal document, or you risk creating needless conflict and a long, expensive court process for your loved ones.

When working with us as your Personal Family Lawyer®, naming legal guardians for your kids could not be any easier or more convenient. Indeed, creating the legal documents that will ensure your children will be raised to adulthood by the people you trust most and are never placed in the care of strangers (even temporarily) is one of our specialties. And we accomplish this using our comprehensive system called the Kids Protection Plan®.

The Kids Protection Plan® provides you with all of the legal planning tools needed to make sure there is never a question about who will take care of your kids if you and your spouse are in an accident or suffer some other life-threatening emergency. Even if you have already named guardians for your kids in your will, either on your own or with the help of a lawyer, we often find that these plans contain at least one of six common mistakes that can leave your kids at risk.

This happens because most lawyers are not trained to understand exactly what is necessary for planning and ensuring the well-being and care of minor children. However, all Personal Family Lawyers® have been trained by the author of the best-selling book, Wear Clean Underwear!: A Fast, Fun, Friendly, and Essential Guide to Legal Planning for Busy Parents, on legal planning for the unique needs of families with minor children at home.

Best of all, we have created an easy-to-use (and 100% free) website you can visit right now to take the first steps to create legal documents naming the long-term guardians you would want to care for your children if you could not. Do it here now.

From there, you can schedule a Family Wealth Planning Session™ with us where we will put the full Kids Protection Plan® in place, and determine if there is anything else you might need to ensure the well-being and care of your children no matter what happens.

Do not wait to take care of this urgent matter. In fact, if you have minor children, your number-one planning priority should be naming legal guardians to care for your children should anything happen to you. And if you need any help with this process, reach out to us, your Personal Family Lawyer®, and we will be glad to walk you through it.

A Trusted Advisor For Your New Family

Getting married is an exciting first step for your new family, and you should start things off right by getting your estate plan properly prepared. But here is the thing about estate planning—it is not just about creating a set of documents and then filing them away in a drawer and never looking at them again until something happens.

Like your family, your planning needs are constantly evolving, so you must ensure your plan is regularly updated as your assets, family situation, and the laws change. If you do not keep your plan updated, it will be totally worthless when your family needs it. In fact, failing to regularly update your plan can create problems that leave your family worse off than if you had never created a plan at all.

As your Personal Family Lawyer®, we have built-in systems and processes to ensure your plan is regularly reviewed and updated, so you do not need to worry about whether you have overlooked. What’s more, our planning services go far beyond simply creating documents and then never seeing you again.

Indeed, we will develop a relationship with you and your family. This is so we can get to know you, your wishes, and be there for you throughout the many stages of life—and above all, be there for your loved ones if and when you cannot be. Contact us, your Personal Family Lawyer® today to get things started with a Family Wealth Planning Session™.

Proper estate planning can keep your family out of conflict, out of court, and out of the public eye. If you’re ready to create a comprehensive estate plan, contact us to schedule your Family Wealth Planning Session. Even if you already have a plan in place, we will review it and help you bring it up to date to avoid heartache for your family. Schedule online today.

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