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Horizon Elder Law & Estate Planning Blog

Wednesday, April 15, 2015

A Will Does Not Always Have the Last Word

A will is an important estate planning document that everyone should have. If drafted properly, your will serves important purposes such as nominating a personal representative to administer your estate according to your wishes. However, a will has some limitations, and therefore certain language and items are not suited to be included in the will.

Accounts with Designated Beneficiaries

Many assets, including some financial accounts, life insurance and retirement accounts are distributed to beneficiaries pursuant to a designated beneficiary form and cannot be distributed to someone else through a will. To revise a named beneficiary, you must request and complete the beneficiary designation form provided by the financial or insurance company.

Property Held in Joint Tenancy

Property owned by two or more joint tenants is automatically distributed to the surviving joint tenant(s) by the operation of law. Therefore, upon your death, the joint property passes directly to the surviving joint tenant(s), despite language in your will to the contrary.

Property in a Living Trust

When property is titled in your living trust, the terms of the trust determine who will inherit the property, despite any contradictory language in your will.  If you would like to change your beneficiary provisions, you must do so through the living trust and not through your will.

Nomination of Joint Guardians

The nomination of a guardian for minor children is possible in a will. However, nominating joint guardians to serve together is not always in the child’s best interest. If you nominate a guardian and his or her spouse jointly, each will have equal rights to the child’s care. In the event of a divorce, each proposed guardian will have the legal right to be the guardian, which right may become contested and impede the child’s care.  Additionally, a will does not become effective until your death.  Should you become incapacitated and need a guardian for your children prior to your death, the will would not be the optimal place to make this nomination.  A better option is to execute a stand-alone document nominating a guardian in case of your incapacity or death.

Funeral Instructions

It is not proper to leave your funeral, memorial service, and/or burial instructions in a will, since a will is oftentimes reviewed after the funeral occurs. It is better practice to have a meaningful conversation with your loved ones, leave a letter of instruction, and/or include language within your advance health care directive, as that document is oftentimes reviewed immediately prior to death. You may also make pre-arrangements with a funeral home.

Language to Eliminate or Minimize Estate Taxes

Assets distributed by a will are still subject to estate taxes. In the event that you have a taxable estate, which is currently defined as having assets in excess of $5.43 million per individual, you may wish to consider a trust specifically designed to eliminate or minimize estate tax obligations.

Provisions for those with Special Needs

Providing assets for people with disabilities requires special estate planning, and a will is not the appropriate document to distribute such assets. There are certain types of trusts, such as special or supplemental needs trusts that specifically address the management of the specific needs of a disabled loved one.

Information You Wish to Keep Private

Upon your death, a will is filed in the county probate court and is accessible to anyone. If keeping your personal information private is a concern, you may wish to utilize a trust for your estate plan. A trust is a private document and is not available to the public.

It is a common misconception that having a will automatically allows you to avoid the probate process. This is incorrect. Financial assets that are distributed through a will are required to be administered through the probate process. Probate is the court’s supervision of the process that transfers the legal title of property from the decedent to his or her beneficiaries. If you wish to avoid probate, you may designate beneficiaries, hold assets jointly, or create and fund a trust.

A will is a necessary document that, if drafted properly, can save your loved ones time and expense as well as provide you with peace of mind. However, if drafted improperly, there is the very real potential that the distribution of assets and final instructions will not be administered as you wished. The advice of an experienced estate planning attorney will greatly assist you in avoiding the pitfalls of an incorrectly drafted will.


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