Having a Will is arguably one of the hallmarks of financial responsibility and awareness. By taking the time and dedicating some resources to prepare this important estate planning document, you make a vital step to ensure that your assets, property, and personal belongings will make their way to your heirs and descendants. Creating a Will is also a way to guarantee that this distribution will take place strictly according to your wishes. Additionally, if you have minor children, a Will can also be used to designate a person who will take legal care of them upon your passing. In short, creating a Will can help you not only preserve your legacy but more importantly, protect the financial future and stability of your family.
However, even though the importance of having a Will cannot be overstated, it is important to recognize that a Will is not the only important estate planning document you may need. For all its benefits and advantages, a Will also has certain legal limitations that you need to be aware of in order to make sure that your estate plan really reflects your goals and wishes. In this article, we will explain and explore 3 things that a Will can’t do and offer some alternatives.
A Will Doesn’t Protect Your Assets from Going Through Probate
Probate is a legal process supervised by the court in which a deceased person’s assets and property are distributed among his or her legal heirs. This process can be time- and money-consuming and is generally inconvenient for the family members of the deceased. If upon your passing your estate goes through the probate process, it can take months or even years before your loved ones can obtain access to your assets. Under some circumstances, it could conceivably put your family at financial risk. For these reasons, most people prefer to take the necessary legal precautions to avoid probate to the greatest extent possible.
Creating a Will, however, doesn’t automatically protect your assets from probate. While a Will can ensure that your money, property, and belongings will be passed to the beneficiaries you designate, the transition will still have to take place under the framework of probate. This means that your family is likely to experience added stress related to additional time, cost, as well as the lack of privacy the probate process entails.
A Will Doesn’t Always Protect Your Assets from Estate Taxes
Upon a person’s death, their assets and property are subject to a federal tax called the estate tax. Most people, however, would like to ensure that, after their death, as much money as possible goes to their family members, charitable organizations, or other beneficiaries rather than to the government. Unfortunately, a simple Will doesn’t always have the legal power to protect the assets of a deceased person from the estate tax. If a persons’ estate is possibly subject to estate tax a more comprehensive plan is usually necessary to take advantage of tax saving options. A person can, however, use their Will to designate which assets will be used to pay the tax.
A Will Doesn’t Apply to Situations Where You Become Incapacitated
A Will contains provisions and guidance that can only relate to how your property and assets should be distributed after your passing. It cannot include any binding directives – for example, with regards to taking care of your financial matters or making medical decisions – that would apply in the event of you becoming incapacitated due to a serious illness or an accident.
What Other Documents You May Need
Some of the limitations of a Will can be bypassed by a variety of other estate planning tools. For example, arranging your assets into a trust can both protect them from going through probate and reduce the size of your estate so that it qualifies for an exemption from the estate tax. Additionally, you can make sure that your interests are protected and your wishes are respected in the event of you becoming incapacitated thanks to documents such as a living Will and a power of attorney.
Solan, Park & Robello are trusted estate planning attorneys practicing in San Francisco who can offer proven solutions to your estate planning issues and advise with regards to what legal tools you may need to achieve your goals. Contact us today to and learn how to best ensure a smooth transition of your assets to your loved ones in a convenient and effective way.
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