Is Having a Will Enough to Protect my Estate?

When you hear the word "will," you might think it’s the one and only document you need to secure your estate after you pass away. Many people believe that simply having a will is enough to protect their assets and ensure their wishes are followed. But is that really true? The answer is more complex than a simple yes or no. This post explores what a will can and cannot do, and what additional steps you might need to take to fully protect your estate.

What a Will Actually Does

A will is a legal document that states how you want your property and assets distributed after your death. It can name guardians for minor children, specify who gets what, and appoint an executor to manage your estate. Without a will, state laws decide how your assets are divided, which might not match your wishes.

Here are some key points about what a will covers:

• Distribution of assets: You decide who inherits your money, property, and personal belongings.

• Guardianship: You can name a guardian for your children.

• Executor appointment: You choose someone to carry out your wishes.

  
  

However, a will only takes effect after you die and must go through probate, a legal process that can be time-consuming and costly.

Limitations of a Will

While a will is an essential part of estate planning, it has several limitations that can leave your estate vulnerable or cause delays:

• Probate delays: Probate can take months or even years, during which your assets may be tied up and inaccessible to your heirs.

• Public record: Probate is a public process, so your will and estate details become public information.

• Does not cover all assets: Some assets, like life insurance policies, retirement accounts, and jointly owned property, pass outside of a will.

• No protection from creditors: A will does not protect your estate from creditors or lawsuits.

• No control over incapacity: A will only works after death and does not address what happens if you become incapacitated.

  
  

Additional Tools to Protect Your Estate

To fully protect your estate, you may need more than just a will. Here are some common tools that work alongside a will:

Trusts

Trusts allow you to transfer assets to a trustee who manages them for your beneficiaries. Trusts can avoid probate, keep your estate private, and provide control over when and how your heirs receive assets.

• Revocable living trust: You can change or cancel it during your lifetime. It helps avoid probate.

• Irrevocable trust: Once set up, it cannot be changed. It can protect assets from creditors and reduce estate taxes.

  
  

Beneficiary Designations

Certain accounts like IRAs, 401(k)s, and life insurance policies pass directly to named beneficiaries, bypassing the will and probate. It’s important to keep these designations up to date.

Powers of Attorney

A durable power of attorney lets someone manage your financial affairs if you become unable to do so. A healthcare power of attorney appoints someone to make medical decisions on your behalf.

Joint Ownership

Owning property jointly with rights of survivorship means the property automatically passes to the surviving owner without probate.

Why You Need a More Comprehensive Estate Plan

Relying on a will alone can leave your estate exposed to delays, legal challenges, and unintended consequences. A comprehensive estate plan combines a will with trusts, powers of attorney, and beneficiary designations to cover all bases.

For example, a family with minor children might use a will to name guardians but also set up a trust to manage assets for the children’s benefit. Someone with significant assets might create an irrevocable trust to reduce estate taxes and protect assets from creditors.

Common Misconceptions About Wills

• “A will avoids probate.” Actually, a will must go through probate to be valid.

• “My spouse automatically inherits everything.” This depends on state law and whether you have a will.

• “I don’t need a will if I have a small estate.” Even small estates can benefit from a will to avoid confusion and delays.

• “I can write my own will without help.” DIY wills can lead to mistakes and may not hold up in court.

  
  

Steps to Take After Creating a Will

Creating a will is just the start. To protect your estate effectively:

• Review and update your will regularly, especially after major life events like marriage, divorce, or the birth of a child.

• Coordinate your will with other documents like trusts and beneficiary forms.

• Communicate your plans with your executor and family members to avoid surprises.

• Consult an estate planning professional to ensure your documents meet legal requirements and reflect your wishes.

  
  

Final Thoughts

While a Will may ultimately accomplish carrying out your wishes, it may not accomplish all that you intend. Consider consulting with Life Planning Team to go over your wishes to ensure the best plan is in place to protect your Estate.