Estate Planning Blogs

Estate Planning: Why a Will is Only a Small Part of the Picture.

What is a Will?

A will is a legal document that outlines how a person’s assets will be distributed after death. A person’s assets can include money, property, and possessions. When most people think about estate planning, they think about drafting a will. However, a will is only a tiny part of the picture. In addition, a will needs to go through probate to be executed. Probate can be a lengthy and expensive process. Additionally, there are other things to consider when estate planning, such as trusts, powers of attorney, and advance directives.

It’s essential to consult with an experienced estate planning advisor to ensure that your assets are distributed according to your wishes. An experienced estate planning advisor can help you determine which tools are right for you and your family. They can also help you navigate the complex legal landscape surrounding estate planning.

Working with an experienced advisor can help make sure that all of your bases are covered. If you don’t have an estate plan in place, your assets will be distributed according to your state’s laws of intestate succession, which may not be consistent with your wishes.

The Benefits of Having a Will

1. A will allow you to control how your assets are distributed after death. Without a will, the state will decide how your assets are divided.
2. A will can help to avoid family conflict. If you have specific wishes for how your assets should be distributed, it is best to put them in writing in a will. This can help avoid arguments and confusion among loved ones after death.
3. A will can help you to plan for incapacity. If you become incapacitated and unable to make decisions about your finances or healthcare, a will can designate someone else to make those decisions for you.

The Limitations of a Will

While a will is an essential part of estate planning, it is not the only thing to consider. A will does not cover everything in an estate, and there are limitations to what it can do.

For example, a will cannot deal with specific property types, such as life insurance policies or retirement accounts. This distinction is because these assets generally have beneficiary designations that precede a will.

A will also cannot deal with debts or liabilities. Therefore, any debts owed must be paid out before any assets can be distributed to beneficiaries. This distribution can sometimes lead to unexpected consequences, such as beneficiaries receiving less than expected or even nothing if the debts are large enough.

Finally, a will is only valid after death. Therefore, a will cannot be used to make decisions or act while the person is alive.

What else should you consider when estate planning?

Another document to consider is a revocable living trust. This type of trust can help your assets avoid probate, the legal process of distributing your property after you die. Probate can be time-consuming and expensive, so a revocable living trust can be an excellent way to keep your family from dealing with it.

The benefits of having a living trust.

A living trust is a legal document that allows you to control how your assets will be distributed after you die. You can use a living trust to:

1. Keep your affairs private: Unlike a will, which becomes a public record after you die, a living trust remains private.
2. Avoid probate: Probate is the legal process of distributing your assets after you die. If you have a living trust, your assets can be distributed without probate. This can save time and money.
3. Reduce taxes: A living trust can help reduce taxes on your estate.
4. Provide for your family: A living trust can provide for your spouse and children if you die unexpectedly.
5. Make sure your wishes are followed: You can use a living trust to ensure that your assets are used the way you want them to be used.

Your estate includes all of your assets, including your home, savings, investments, and life insurance. You also have liabilities, such as credit card debt and mortgages. To get your affairs in order, you need to understand what you own and what debts you owe. You must also consider who will manage your finances and healthcare if you become incapacitated.

What Is the Difference Between a Will and a Living Trust?

A will is a legal document that specifies how a person’s assets will be distributed after their death. A living trust is a legal entity that can hold and manage the property on behalf of another person.

Wills and living trusts serve different purposes. Wills are typically used to distribute a person’s assets after they die. Living trusts are typically used to manage a person’s assets while alive.

There are several key differences between wills and living trusts. Wills must go through the probate process, which can be time-consuming and expensive. Living trusts avoid probate because the assets in the trust are not considered part of the person’s estate.

Another key difference is that creditors can reach the assets in a will through the probate process. Creditors cannot reach the assets in a living trust.

Finally, guardianship or conservatorship may be required if a person becomes incapacitated and cannot manage their own affairs. With a will, a guardian or conservator must be appointed by the court. With a living trust, the trustee can step in and manage the trust property on behalf of the beneficiary.

Creating a plan to handle your wishes with your estate is vital. The professionals at Alta Estate Services are well versed in Strategic Estate Planning and can be a valuable asset when creating your living trust for your estate. Contact them today.

Mark Fishbein of Tucson, Arizona, has been providing legal documents for Estate Planning, Family Wills, and Living Trusts for over two decades. His team also provides experienced business consulting on LLC creation and general business advice. We hope the following blog articles will provide insight and valuable information into the world of estate planning.

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