Having a will is definitely important, however, there are limitations to what a will can do by itself. Fortunately, other estate planning documents can fill in the gaps. For example, having a General Durable Power of Attorney (sometimes referred to as a POA) and Advanced Medical Directive will ensure that you retain some control over what is done on your behalf if you become incapacitated. Each of these documents empowers one or more individuals to make decisions about your assets or medical care when you are unable. Having these documents in place allows you to choose who you want to handle your affairs, rather than having a court make that decision for you, which could lead to the appointment of someone you would not have chosen for yourself.
Additionally, many bank accounts, life insurance policies, annuities, retirement accounts like IRAs and 401(k)s, and jointly-owned property allow you to use a beneficiary designation, instead of a will, to determine how the assets will be distributed. Many IRS rulings and court cases have concluded that the owner’s statements and intent in his or her will do not matter if they contradict what was written on the beneficiary designation form. This is why it’s also important to review your beneficiary designations periodically to ensure they reflect your wishes now, and not what you wanted when, for example, you opened the account 20 years ago.
Another estate planning tool families can utilize to provide a greater level of flexibility in how their future is managed is a trust. There are different kinds of trusts that can be established for your needs. For example, a revocable living trust can allow your estate to avoid probate entirely—and the public scrutiny that accompanies it. Trusts can also protect your assets against creditors and other threats while protecting your heirs’ inheritances against creditors, predators, remarriage, and even their own poor decisions if they are not yet mature enough to handle an inheritance on their own.
As you can see, a will helps you accomplish important goals, but additional estate planning tools and strategies are available to protect you and your loved ones both after you pass away and in the event of disability while you are still alive.
To kick off the new year right, it’s a good idea to meet with an experienced estate planning attorney like Ms. Hepler at Collins & Hepler, PLC to discuss your own situation.