You may think a simple will is all you need when you are planning your estate. It’s relatively straightforward, and trusts are only for people with multi-generational wealth, right?
In fact, while a basic will covers essential instructions, relying solely on a will can lead to unforeseen complications. Understanding these limitations helps you make smarter choices about your estate.
Why a Simple Will Falls Short
A will clearly outlines your wishes, including who receives your assets and manages your estate. However, it lacks depth. Complex situations like blended families, business ownership, or significant assets require more precise planning.
Blended Families Need Clearer Instructions
If your family includes children from previous marriages, a simple will can create unintended issues. For example, leaving everything to your spouse and trusting they will distribute assets fairly among all children can cause disputes.
Without explicit provisions, your spouse is not obligated to follow your intentions. A trust explicitly ensures each child receives the inheritance you intend.
Simple Wills Do Not Avoid Probate
When you use a will, you name an executor in the document to act as the administrator. This individual or professional fiduciary cannot act independently. They are required to admit the will to probate, and subsequently, the probate court will supervise the administration of the estate.
During this process, the validity of the will is affirmed, and final debts are paid. It serves a purpose but is not necessarily positive for the rightful heirs to an estate.
First, there is the time consumption. It will take about nine months at minimum to run its course, and complicated cases can take longer periods. Probate expenses can be considerable, and the records are available to interested parties, so there is a loss of privacy.
Incapacity Is Not Addressed
A will becomes effective only after your passing. But if you are incapacitated, your will provides no guidance. This is a major issue because an estimated 6.9 million Americans age 65 and older are living with Alzheimer’s dementia today. Plus, there are other causes of incapacity.
To manage incapacity, you need a financial power of attorney and advance healthcare directives. These assert your life support choices and empower trusted individuals to handle your financial and medical decisions when you can’t.
No Asset Protection
You have spent a lifetime building a legacy, but creditors, divorces, or lawsuits could claim parts of the inheritances you intend to leave to your heirs. A will offers no protection against these threats. The right type of trust can shield your assets from creditors and lawsuits after your passing.
Business Owners
Business ownership demands detailed succession planning. A will often lacks the specifics needed to smoothly transfer your business.
Without detailed arrangements, your heirs could face disputes or even lose control of the business. Detailed estate planning ensures your business remains stable and continues as you envisioned.
Minor Children
Naming a guardian in your will is not sufficient for minor children. Your plan must also address financial management. Leaving significant assets directly to minors creates legal complications. Trusts offer a practical solution, managing assets responsibly until your children reach adulthood.
Real Estate Needs Strategic Management
Probate complicates the transfer of real estate, potentially causing delays and added expenses. A simple will alone can’t prevent this. Beneficiary deeds or trusts simplify property transfers and minimize probate delays and costs.
Simple Wills Are Not Flexible
Life events such as marriages, divorces, births, and deaths require flexibility. A will does not easily accommodate these changes without frequent updates. Neglecting regular updates can result in disputes or misallocation of assets. More comprehensive estate plans offer built-in flexibility.
Moving Beyond a Simple Will
To fully secure your estate and your family’s future, you need more than a simple will. The right type of trust can protect assets after you are gone, provide measured distributions, and address specific circumstances related to a beneficiary.
We have touched upon the value of incapacity planning as well, and this is important even if you use a will as your asset transfer vehicle. When you work with our firm to develop your plan, we will provide guidance to make sure that all of your bases are effectively covered.
Get Your Free Estate Planning Worksheet!
Since you’re here on our site, you must be interested in learning more about this important subject. If you are in this mode, this is the place to be, because we update our blog frequently, and there are other resources you can access free of charge.
One of them is our estate planning worksheet. This tool has been carefully prepared to provide a more thorough understanding of the process, and it has been very well received. It is being offered on a complimentary basis, and you can visit this page to grab your copy: Estate planning worksheet.
Need Help Now?
If you have already decided that you are ready to work with a Chico, CA estate planning lawyer to put a plan in place, our doors are open. When you work with us, you will receive personalized attention, and your plan will be carefully crafted to suit your specific needs.
As the years pass, if and when adjustments become necessary, we will be well-positioned to help you make revisions. Our firm can also be engaged to provide assistance during the estate administration phase if guidance is necessary.
To set the wheels in motion, give us a call at 530-343-3454 or send us a message through our contact page.