A will isn’t the right document to manage certain types of property or matters. Below is what a will won’t do.
Wills are great, simplistic, less costly ways to handle many people’s estate planning requirements, but they are can’t to do it all. Below are some things you should not expect to achieve in your will.
Leave Specific Types of Property
In a lot of cases, you cannot use your will to leave:
- Property you keep in joint tenancy with another person (or in “tenancy by the entirety” or “community property with right of survivorship ” with your partner).
- Property you have transferred into a living trust.
- Revenue of a life insurance policy for which you’ve appointed a beneficiary.
- Funds in a pension plan, IRA’s, 401(k) plan, or other retirement plan for which you’ve appointed a beneficiary on documents provided by the account admin.
- Property held in beneficiary TOD documents. This could include securities, and—in many states— vehicles or realty.
- Funds in a POD financial institution account.
Leave Funeral Directions
Wills are usually not read—or even located—until days or even weeks following a death. That’s long overdue to be of help to the individuals that need to make immediate decisions about the arrangement of a body and funeral and/or memorial services. Alternatively, make a separate document detailing your wishes and let your executor know where to find it when it’s time.
Decrease Estate Taxes
If you think that your estate is going to owe federal estate taxes, you might want to take precautions now to decrease the tax debt. A will is not going to help you avoid taxes. Many types of trusts can decrease or delay the tax bill.
Avoid Probate
Property left through a will might spend numerous months or up to a year caught up in probate court prior to it being allowed to be distributed to the people that inherit it.
Put Specific Conditions on Gifts
There are also a couple of legal restrictions on what you can do through a will. For instance, you can’t leave a gift that is provisional on a marriage, a divorce, or change of faith of a beneficiary. You are able to, on the other hand, try to encourage lesser matters. For instance, you could leave funds “to Sophia, if and when she goes to college.” Making these conditional gifts, on the other hand, usually creates a problematic situation—who is going to enforce the will’s terms, and for how long?
Leave Funds for an Illegal Intention
This one usually doesn’t come up, but you can’t set aside funding for something illegal, like encouraging minors to drink.
Arrange to Care for a Beneficiary that has Special Needs
When you want to provide long-term care for someone, a will isn’t the right document. It’s better to set up a trust that’s created for the beneficiary’s requirements. Special needs trusts can provide extra funding for a loved one that has a disability, without endangering government benefits.
Leave Funds to Pets
Pets are unable to own property, so don’t attempt to leave property directly to your pets through your will. Alternatively, leave your pet to an individual that has agreed to give a good home—and leave that person funding to assist with pet-related costs. Many states allow you to set up a trust for animals, but that’s usually not necessary when you have confidence in the person you’ve appointed to care for your pets following your passing.
Source:
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Betsy Simmons Hannibal, A. (2015, November 6). What a will won’t do. www.nolo.com. Retrieved October 25, 2022, from https://www.nolo.com/legal-encyclopedia/what-will-wont-do-29767.html
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