A Will can help you accomplish a number of important planning goals. For instance, it allows you to control how your assets are distributed after you pass away. Without a Will, your assets will be distributed according to what is known as intestate succession, in accordance with strict guidelines set by the state. What you “would have wanted” is irrelevant to the state. Your assets must be distributed, and the state has devised a formula to do so.
A Will also gives you control over how your minor children will be raised if something terrible happens to you and your spouse. Your will allows you to name people of your choosing—people you trust—to raise and care for your children if you cannot. Without a Will, the court will decide who has control over your children. The court's decision could lead to your children being raised in a place and manner you never would have wanted.
In short, a Will allows you to accomplish important goals after you have passed away. However, it does not allow you to manage your affairs if you become incapacitated. To accomplish that, you need additional planning documents such as a power of attorney and advanced medical directive. These empower one or more individuals to make decisions about your assets or medical care when you are unable to make them on your own. Without these critical documents, a court will appoint someone to make decisions and act on your behalf. This could very well be someone you would not have chosen yourself. Similarly, doctors would have the authority to take actions they believe are in your best interest regardless of what you would or would not have wanted.
Another reason a Will isn't enough is that the ownership of many assets transfers outside the Will, including life insurance, annuities, retirement accounts like IRAs and 401(k)s, jointly-owned property and more. The beneficiary designations of these assets, not the Will, determine how they will be distributed. Many IRS rulings and court cases have concluded that the owner's statements and intent in his or her Will do not matter if they contradict what was written on the beneficiary designation form. This is why it is so important to review your beneficiary designations periodically to ensure they reflect your wishes now, not what you wanted when, for example, you opened the IRA 20 years ago.
Many families utilize Trusts in their estate plans. These provide a greater level of protection and flexibility than what a will alone can provide. For instance, a Revocable Living Trust allows your estate to avoid probate entirely—and the public scrutiny that accompanies it. Trusts can also protect your assets against creditors and other threats. In addition, they can protect your heirs' inheritances against creditors, predators, remarriage, and even their own poor decisions if they are not yet mature enough to handle an inheritance on their own.
The bottom line is this: While a Will can help you accomplish important goals, additional planning tools and strategies can help you accomplish a great deal more, both after you have passed away and while you are still alive.
Be sure that you are covered with all the necessary documents that protect you and your family. Schedule a complimentary consultation with our office to ensure peace of mind that all things are in place, exactly as you need them to be. Get started by calling 260-969-1177 or by visiting www.grundenlaw.com