Unfortunately, many people do not realize that crafting an estate plan involves more than just creating a will. A will cannot accomplish many things you may want in your estate plan. They can, however, deal with issues such as naming and executor, stating who will be a guardian for your children, and distributing property.
Wills cannot deal with particular types of assets and have little effect on reducing your estate taxes. Instead, other estate planning tools more effectively deal with these issues. Below are several things that a simple will cannot accomplish. You should consider other estate planning tools that Biddle Law can help you use effectively.
Wills Cannot Apply to Specific Assets
Certain assets have beneficiaries built into the asset itself. For example, property that you hold with someone else, such as a joint bank account, will often automatically become the sole property of the other person when you pass away. Other assets will also name beneficiaries, even if they are not included in your will. Retirement plans and life insurance policies are typical examples.
For some people, shared assets and property with built-in beneficiaries may make up a large part of their estate. You should ensure that these assets complement the rest of your estate plan.
Wills Cannot Convey Burial Instructions
The will is usually not read until after the burial or funeral occurs. That means that if you only include your burial instructions in your will, your loved ones may not realize your wishes until after your burial has already occurred. Including these instructions in your will is also problematic because the body is technically not considered “property” under the law, which means that it cannot be administered in a will.
Instead of using a will to convey your burial instructions, you may want to consider developing a Durable Healthcare Power of Attorney that authorizes a specific individual to carry out your wishes. You can set out your wishes in a separate document or simply convey them verbally to your loved one.
A Will Does Not Reduce Estate Taxes
If you are concerned about paying estate taxes on your assets, a simple will does not address this concern. Instead, you will need to work with an estate planning attorney to use other estate planning tools to avoid estate taxes. Certain types of trusts and gifts can deal with many issues related to estate tax.
Reducing estate taxes often involves removing your assets from the estate. Any asset that is administered through your will is part of the estate. That means that the more assets included in your will, the higher the likelihood that you will trigger an estate tax.
Getting Your Estate Plan Just Right
A will is often an important part of an estate plan, but it should not be the only instrument you use to distribute your assets. A will should be utilized in combination with other estate planning tools such as trusts and insurance to accomplish your estate planning goals. Our team can help you develop a plan that fits your unique needs and financial situation. Call today for more information.