Asset Protection: When a Will Won’t Work
One of the most prevalent misconceptions when it comes to estate planning is that if you have a will, it will take care of everything that needs to happen after you die in terms of your assets. But before you leave everything to just a will, consider these circumstances where a will simply doesn’t work:
Avoiding Court. To take effect, a will must go through the probate process (called a conservatorship during your lifetime), which can be lengthy and deny your heirs (or family while you are living, but incapacitated) a quick resolution to the distribution of your estate (or the ability to pay your bills while you are living). This is particularly true if you own property in another state.
Protecting privacy. Once a will is open to probate, it is open to everyone -- meaning that anyone can get access to it and learn everything you owned and where it is going. Wills can also contain personal information that is attractive to identity thieves.
Protecting you in case of incapacity. Since a will only goes into effect upon death, it provides zero protection for you if you should become incapacitated and no longer able to handle your own financial affairs or make decisions about your health care. If that were the case, your family would have to go through the stress and expense of petitioning the court to appoint a guardian or conservator to handle your affairs. This is costly and can even drain your entire estate. This can be avoided by having advance medical directives and a financial power of attorney drawn as part of your estate plan.
Protect your assets. Passing assets to heirs via a will does not provide any protection for those assets. Once they are distributed, they may become vulnerable to a divorce action, creditors or bad financial decisions by your beneficiaries. Placing your assets in a trust gives you more control over how and when they are distributed, and protects them from creditors and judgments.
One of the main goals of our law practice is to help families like yours plan for the protection of yourself and your family through thoughtful estate planning. Call our office today to schedule a time for us to sit down and talk through a Family Wealth Planning Session, where we can identify the best strategies for you and your family.