Some people have been trained to think, “If I have a will based estate plan that means my estate planning has been properly taken care of. I’ve done all that I can for my family.” Unfortunately that is not the case. While a will based estate plan is better than no estate plan it unfortunately falls short in several very important way.
It forces your family into probate
If you have a will based estate plan your family must go through probate to obtain their inheritance. It’s as simple as that. Probate typically takes 9-18 months and costs your family 3% – 8% of their inheritance in fees and expenses. If you become incapacitated and do not have a trust based estate plan you are forcing your family to go through a conservatorship process in the court. The court process becomes more complex, lengthy, and expensive should you own out of state property. The way to avoid probate and conservatorship is with an estate plan based around a revocable living trust.
It exposes your loved ones to creditors and predators
Probate court is a public forum. This means that not only are the hearings open to the public but the records of the case, as well as your actual will, are made public. There are individuals that prey on grieving families who have lost a loved one. By basing your estate plan on a will you are exposing your family to predators and scam artists. A revocable living trust avoids these issues because it is administered in private; your lawyer’s office.
It does nothing in the event of your incapacity
A will is merely a piece of paper until you die. It has no power while you are alive. In the event you are incapacitated from an accident or illness, or you have lost the ability to makes decisions concerning your finances or medical care, a will is useless to help. If your planning is based entirely around a will and something happens to you whereby you become incapacitated your family will find themselves in court. The court will need to appoint a guardian or conservator and this person will be empowered to make decisions on your behalf. The whole process is time consuming and expensive. It’s a waste of money that could have been avoided had you planned prior to your incapacity. Medical directives and financial powers of attorney effectively solve many of these issues.
It does nothing to protect your assets
When you die you have the opportunity to leave your family one final gift in addition to their inheritance. It is when you can most powerfully protect the assets you are leaving them by having them placed in trust. Creating a trust during life for your loved ones certainly has its place, we do this often for clients, but a trust created at your death affords more creditor protection. If at your passing you simply give your assets to your beneficiaries outright they will be exposed to creditors, predators, divorce, as well as bad financial decision making in general. Assets in a trust are afforded better protection from creditors and predators and you can also retain a say in how those assets are distributed. This is not attempting to control things from the grave. It is a sign of love and respect.
Experience has shown that having a will as the foundation of your estate plan is not the best thing for you or your loved ones. Call our office today at (646) 736-7539 to schedule a time for us to meet, review your existing estate plan, if any, and together determine the best course of action for you and your loved ones.