New clients often tell me they just need a Will. A Will is a necessary document that serves a very important purpose, but on its own does not provide all of the protection and security needed by most individuals and families. Your Will should be part of a more comprehensive plan that meets your needs and goals.
Planning for Incapacity
Because a Will is only effective after death, it does nothing to protect you or your family if you become incapacitated. Other documents can be helpful in this regard. By executing a Durable Power of Attorney, you can authorize someone you trust to handle your finances if you cannot. Similarly, by executing a Health Care Proxy, you can authorize someone you trust to make medical decisions on your behalf if you cannot. Additionally, an Advance Directive (sometimes called a Living Will) allows you to express your wishes regarding artificial life support.
Designated Beneficiaries and Unintended Consequences
Among your most valuable assets may be retirement accounts and life insurance policies. Both allow for the designation of death beneficiaries. If your designated beneficiary is alive when you pass away, that person will inherit that asset, regardless of the terms of the Will. For this reason, it is very important to regularly check your designations. In particular, problems can arise following a divorce. After a divorce, Divorced Spouse A might execute a new Will directing all of his or her property to someone other than Divorced Spouse B, but if Divorced Spouse B remains a designated beneficiary on a retirement account or life insurance policy, then Divorced Spouse B will likely inherit that asset. A Will cannot prevent this from happening.
Protecting Children’s Inheritances
Remember that the legal age of adulthood is 18, meaning that under a Will, a child could inherit large, valuable assets at a relatively young age. Many parents are concerned about the risks of youthful inexperience if this situation arises, but a Will cannot prevent this possibility. Another arrangement, such as setting up a Trust, could protect and manage funds for children until they reach a more appropriate age.
Reducing Estate Tax Liability
Under current law, most estates are not subject to federal estate tax, because individual estates worth less than $12 million are exempt. However, there is a separate Massachusetts estate tax that imposes liability for any estate worth more than $1 million. There are techniques available to reduce that burden, but they are not available with only a Will. To achieve this goal, a plan must include methods such as trust funding and planned gifting.
Avoiding Probate
Finally, a Will does not help to avoid the probate process. To the contrary, after death, a Will is filed at the Probate Court as part of the probate process. This court-supervised process is a slow, complicated and expensive one that lacks privacy. A more comprehensive plan that may include trusts, joint ownerships and designated beneficiaries will help to avoid probate.
The advice and guidance of a qualified estate planning attorney can help you accomplish any of these goals that are important to you.
Planning for Incapacity
Because a Will is only effective after death, it does nothing to protect you or your family if you become incapacitated. Other documents can be helpful in this regard. By executing a Durable Power of Attorney, you can authorize someone you trust to handle your finances if you cannot. Similarly, by executing a Health Care Proxy, you can authorize someone you trust to make medical decisions on your behalf if you cannot. Additionally, an Advance Directive (sometimes called a Living Will) allows you to express your wishes regarding artificial life support.
Designated Beneficiaries and Unintended Consequences
Among your most valuable assets may be retirement accounts and life insurance policies. Both allow for the designation of death beneficiaries. If your designated beneficiary is alive when you pass away, that person will inherit that asset, regardless of the terms of the Will. For this reason, it is very important to regularly check your designations. In particular, problems can arise following a divorce. After a divorce, Divorced Spouse A might execute a new Will directing all of his or her property to someone other than Divorced Spouse B, but if Divorced Spouse B remains a designated beneficiary on a retirement account or life insurance policy, then Divorced Spouse B will likely inherit that asset. A Will cannot prevent this from happening.
Protecting Children’s Inheritances
Remember that the legal age of adulthood is 18, meaning that under a Will, a child could inherit large, valuable assets at a relatively young age. Many parents are concerned about the risks of youthful inexperience if this situation arises, but a Will cannot prevent this possibility. Another arrangement, such as setting up a Trust, could protect and manage funds for children until they reach a more appropriate age.
Reducing Estate Tax Liability
Under current law, most estates are not subject to federal estate tax, because individual estates worth less than $12 million are exempt. However, there is a separate Massachusetts estate tax that imposes liability for any estate worth more than $1 million. There are techniques available to reduce that burden, but they are not available with only a Will. To achieve this goal, a plan must include methods such as trust funding and planned gifting.
Avoiding Probate
Finally, a Will does not help to avoid the probate process. To the contrary, after death, a Will is filed at the Probate Court as part of the probate process. This court-supervised process is a slow, complicated and expensive one that lacks privacy. A more comprehensive plan that may include trusts, joint ownerships and designated beneficiaries will help to avoid probate.
The advice and guidance of a qualified estate planning attorney can help you accomplish any of these goals that are important to you.