Wills are an excellent fundamental of many estate plans. If you pass away without a will, a New York court will be tasked with making the difficult decision of who should receive your assets as well as who should look after your children. If you’re like one of many adults in New York who has been forced to confront their mortality this year due to the COVID-19 pandemic, you’ve likely considered whether your will is up to date or if you’ve ever written one at all. While all estate planning should begin with a will, however, you should realize that wills are just one small piece of the estate planning puzzle. This article reviews just some of the most critical reasons why your estate plan needs more than a will.
# 1 – Wills Have Limitations Regarding Assets
Wills are estate planning documents that help you determine how matters should be handled when you pass away. You can be as specific as you’d like with wills or keep the terms of these documents open. While wills control the distribution of many assets, certain other assets pass outside the terms of wills including retirement accounts like 401(k) plans and individual retirement accounts. This means that beneficiaries listed on retirement accounts will often receive assets regardless of the terms of a will. Regular bank accounts can also have beneficiaries listed. If a beneficiary is not listed on the terms of retirement accounts, these assets will automatically pass into probate.
# 2 – Wills Do Not Address Incapacity and Other Healthcare Issues
Wills cannot address incapacity and other healthcare-related issues in the way that advance health-care directives or living wills can. These documents perform the powerful role of outlining your wishes if you become incapacitated as a result of illness or injury. For example, if you end up on life support, a living will can make a decision about what life-saving measures you should receive instead of placing your loved ones in the position of making this choice. It is just as important to create a power of attorney which will assign a person to handle your financial and medical affairs if you cannot do so. Often, an individual who is given this responsibility regarding health care is different from whom you would appoint to handle financial issues.
# 3 – Trusts Can Provide Greater Asset Control Than Wills
If you want to pass on your assets, but do so in a way that a person with poor money management abilities has unlimited access to a sudden windfall, you should consider the advantages that a trust can provide. Trusts hold assets for beneficiaries and exist as separate legal entities created by the documents that establish them. If you decide to utilize a trust, assets will pass to the trust instead of directly to your heirs.
Speak with an Experienced Estate Planning Attorney
The estate planning process is a nuanced one, but a skilled estate planning lawyer can help you create a strategy that is capable of achieving each of your goals. Contact Ettinger Law Firm today to schedule a free case evaluation.