Do you know the difference between a Will-based estate plan and a Trust-based estate plan? The biggest difference between a Will and a Trust is that without a Trust in place, your family will have to go to Court to get access to your assets in the event of your incapacity or death. You may think having a Will allows your loved ones to inherit your assets without court intervention, but this is not true. While your Will indicates who you want to have access to your assets and how you want them distributed, Wills do not avoid the Court process known as probate. As the saying goes, “Where there is a Will, there is a probate.”
Your Family Must Go to Court
The probate process can be an extremely distressing for your loved ones. The proceedings can drag out over months or even years, and in most instances, your family will have to hire an attorney, generating hefty legal bills that can quickly drain your estate. Moreover, probate is public, so anyone can find out the value and contents of your estate. They can also learn what and how much your family members inherit, making them tempting targets for frauds and scammers.
A Will Offers No Protection Against Incapacity
A Will helps ensure your assets are properly distributed when you die. But it offers no protection if you become incapacitated and are unable to make decisions about your own medical, financial, and legal needs. Should you become incapacitated with only a Will in place, your family would have to petition the court to appoint a guardian or conservator to manage your affairs, which can be extremely costly, time consuming, and traumatic.
A Will Doesn’t Protect Against Creditors, Lawsuits, or Poor Decisions
Passing on your assets using a Will leaves those assets vulnerable to several potential threats. If your Will distributes your assets to your beneficiaries outright, those assets are not only subject to claims made by a beneficiary’s creditors, but they are also vulnerable to lawsuits and divorce settlements the beneficiary may be involved in. And if assets left via a Will pass to beneficiaries without any conditions, those assets are susceptible to the beneficiary’s own poor judgment. For instance, a sudden windfall of cash could cause serious problems for someone with poor money-management abilities and/or addiction issues. Moreover, where a beneficiary is a minor, the court will require a conservatorship to manage the minor’s assets until they reach age 18, and when they do, they will receive all of those assets outright with no oversight or control to do whatever it is 18-year-olds do with large sums of money.
Not All Assets Are Covered by a Will
Some assets can’t even be included in a Will. For example, a Will only covers assets or property owned solely in your name. It does not cover property co-owned by you with others listed as joint tenants, nor does a will cover assets that pass directly to a beneficiary by contract, such as a life insurance policy or retirement account.
Don’t Let Your Plan Fall Short
Though a Will is an integral part of your estate plan, a Will is almost never enough by itself. Instead, Wills are often combined with other planning vehicles, such as Living Trusts, to provide a level of protection devoid of any gaps or blind spots. And here’s the thing: If your plan is incomplete, it’s your family that suffers, having to clean it all up after you are gone.
This article is a service of Michelle D. McRee of McRee Law, PLLC. We don’t just draft documents; we ensure that you make informed and empowered decisions about your estate plan, for yourself and the people you love. A complimentary consultation with McRee Law, PLLC empowers you to feel confident that you have the right combination of planning solutions for your family’s unique circumstances. Schedule yours today to get started.