If you have made a will, then you’ve done more estate planning than most Americans. But it may not be enough. One of the most common misconceptions about estate planning is that making a will is going to solve all your problems. Now, it’s certainly better than doing nothing. At least your assets should pass to the people you wish to receive them. Perhaps you’ve appointed an executor or personal representative, and a guardian for the children. That’s all great. But there are many disadvantages to simply relying on a will. For example:
You. By definition, a will only takes effect on your death. It therefore cannot provide for you while you’re still alive. This is a big problem in wills-based estate planning. As medicine develops, the chances of finding ourselves incapacitated but still alive increase. These days, everyone needs to address this eventuality. You need to provide explicit and enforceable instructions as to what you wish to happen should this happen to you: who will make decisions on your behalf if you are incapable of doing so? How will your medical bills be paid? What are your wishes about prolonging your life? A will does not allow you to make these choices.
Delayed distribution. You might prefer that your beneficiaries do not take their legacies as soon as you die – even if they are adults, they may be too immature or inexperienced to manage a substantial gift. Perhaps you might wish for them to receive their entitlements in gradual increments, rather than all at once. Unfortunately, a will does not allow you to delay distribution of your assets in this way. Once probate is completed, your beneficiaries will take their entitlements free and clear of any restrictions.
Will Contests. There is always the possibility that your carefully thought-out distribution of your estate by will may be thwarted after you’re gone: even properly drafted and executed wills are often successfully contested by disgruntled heirs who did not receive their expected legacy. Will contests are relatively cheap and easy to instigate – a person may not even need to hire a lawyer. Once begun, they can be expensive and greatly delay distribution of your estate. Will contests are a particular risk if you decide to change your will shortly before your death.
But by far the biggest problem with wills is that they have to go through the probate process, the thoroughly old-fashioned system that still applies to all estates passing by will or intestacy. Now, many attorneys love probate. Probate has paid for untold amounts of orthodontic work. It has put thousands of attorneys’ kids through college. It has bought countless cars, and possibly yachts. When an estate is probated, there is only one winner. And guess what? It’s not you.
To learn more about the problems of probate, click here.
To find out how we solve all of the above problems, click here.