When most people think about the estate planning process, they think about one thing: writing a will. Many people assume that more in depth estate planning is reserved only for the very wealthy, or they may not even be aware of the numerous other estate planning tools available to them.
While wills are certainly essential tools, they do not necessarily accomplish everything you might expect. Read below to learn about three key estate planning elements that wills do not accomplish on their own:
One of the most important things you need to remember about a will is that it does not go into effect until the person who wrote the will—known as the “testator”—has passed away. Wills are death documents, not life documents, and as such, they do not address the possibility of incapacitation.
Imagine that you were in some sort of car accident which resulted in your falling into a coma. Technically, you are still alive, which means your will is not yet active. But, due to your incapacitation, you are unable to make important decisions for yourself. Who will tell the doctors how to proceed with your medical treatment? Who will pay your bills? Who will sell your assets if you require financial assistance to afford the medical care you need? It is precisely this type of situation that should be addressed and planned for by creating a Durable Power of Attorney. This document grants legal authority to an agent of your choosing to make medical or financial decisions on your behalf should you ever become incapacitated and unable to make them for yourself.
Keep Property Out of Probate
Probate is a legal process that follows a person's death. During probate, the courts will address how the decedent's debts and assets will be administered. They will ensure that any creditors with a legal claim receive payment for the debts out of the decedent's estate, and then will manage the distribution of the remaining assets to heirs. Probate can be a costly and drawn out process, and many people seek ways to prevent their property from passing through probate.
Some estate planning vehicles like certain types of trusts allow you to pass on an inheritance without the necessity of subjecting it to probate. Unfortunately, many people mistakenly believe that including property in their will means that property will circumvent the probate process. In fact, one of the key elements of probate is proving the validity of the decedent's will. As such, most of the property named within a will is going to be subject to the probate process. You will need to utilize other estate planning vehicles besides a will if you want to keep your property out of probate.
End of Life Decisions
As previously mentioned, a will is a document that only becomes active upon the testator's death. A will does not address end of life medical decisions. Many people have strong opinions on end of life care. If death is potentially imminent, some people may want their loved ones to do everything within their power to try to keep them alive, while others may prefer a “Do Not Resuscitate” order. Religious convictions can play a key role in your preferences as well. However, if you are unable to communicate your wishes, the medical staff and your loved ones will have to make these hard choices without your input—that is, unless you create a Living Will. This document, which is different from your Last Will and Testament, explicitly details your wishes regarding end of life treatment.
Additionally, keep in mind that a will probably won't be effective when it comes to your wishes regarding funeral arrangements. Usually, wills are not discovered and read until weeks after a person's death, and funerals usually happen within days. If your funeral wishes are stated in your will, they may not be found until it is too late. You will likely need to create a separate document for your funeral wishes and ensure that your executor knows where to find it when the time comes.
No matter your means or background, everyone can benefit from creating an in depth estate plan beyond a simple will. Contact The Tyra Law Firm today to discuss your options and learn how we can help!