Apart from death and taxes, there are few real absolutes in life. For individuals who truly want to protect their interests and their families, however, estate planning can be said to be an absolute necessity. Oh sure, there are many people who never get around to organizing their affairs and preparing for the future, but that doesn’t mean that they shouldn’t do so. The fact is that a well-conceived estate plan can be essential for protecting your assets, avoiding problems related to incapacity, and ensuring that your loved ones are cared for when you die. Still, most people in the U.S. never even craft a will. And for those who do, the simple fact is that a simple will is never truly enough.
What a Simple Will Can Accomplish
The Last Will and Testament is a valuable instrument for helping your loved ones to settle your estate when you pass away. However, it has limitations that make it an imperfect vehicle for resolving all the important end-of-life and legacy concerns that most individuals need to address. To understand why this is true, it’s important to remember why we create wills in the first place.
Your simple will is designed to ensure that your last wishes are known so that your loved ones receive the inheritance that you want them to have. In addition, the will can afford you an opportunity to name a guardian for any minor children that you might have, provide that all assets are distributed to one spouse if the other dies first, or give everything away to the children if both parents die at once. For many young families with relatively modest assets, those provisions are typically sufficient for basic financial end-of-life planning. There’s more to estate planning than just those distribution issues, however.
Issues a Will Won’t Address
The simple will’s limitations prevent it from providing all the benefits that you need. There are a whole host of other concerns that you should address during any estate planning effort, including:
- Mitigating tax liabilities. Wills provide no tax benefits, and that could leave your estate subject to a variety of different taxes that you could more effectively avoid by using a number of other estate planning tools.
- Probate avoidance. Some people have the mistaken impression that wills can help their estates avoid probate. That’s not the case. Even with a will, your estate will need to go through the probate process so that assets can be properly identified and appraised, debts can be paid, and wealth can be distributed to heirs.
- Special circumstances. Do you have an heir with special medical needs? Are you concerned that his or her inheritance will disrupt critical government benefits? What about your pet? Is there an heir with wasteful spending habits who could just squander his inheritance if you don’t protect him from himself? Your simple will won’t provide any assistance with any of these special circumstances.
- Planning for retirement, long-term care, and other important planning needs. Are you prepared to pay for long-term care if it becomes a necessity? Do you have enough money to maintain your current lifestyle in retirement? Your will won’t help in any of these areas.
- Protection against incapacitation. If injury or illness strikes, your simple will cannot help your family to get important medical and financial decisions addressed. Without the right planning to address those concerns, you’ll end up with a court-appointed guardian making those decisions on your behalf.
Other Tools You Need
To address all those concerns that the simple will cannot handle, you’ll need an estate plan that includes a variety of other tools. These planning tools can help to better manage your financial affairs, guard against incapacity, address special needs, and ensure that your interests and loved ones are properly protected. They include:
- Living trusts can provide you with important tax benefits, keep certain assets out of probate, and address unique circumstances that a simple will cannot manage. With a Special Needs Trust, you can leave a disable heir an inheritance that will not disrupt vital benefits. A Medicaid trust can help you ensure that you protect assets from the high costs of nursing home care. There’s even a Pet Trust that can help you take care of your beloved family pets when you die.
- Powers of Attorney. These documents can help you to ensure that you have continuity in your medical and financial decision-making by naming someone to serve as your attorney-in-fact in the event that you lose the capacity to make your own decisions.
- Retirement planning. Your estate planning efforts will be all but meaningless if you don’t have any wealth to manage. With the right retirement planning strategy in place, you can ensure that you have the nest egg and retirement income you need to enjoy your retirement and leave behind a legacy for future generations.
- Medicaid planning. Since half of all adults will probably need long-term care at some point in their lives, it is important to plan ahead for the benefits you might need to pay for that care. Medicaid planning can help you to secure your assets even as you obtain eligibility for that assistance.
To make the most of these tools and ensure that you have all your estate planning needs covered, you need the protection that only a comprehensive estate plan can provide. To get those protections, you need the help of an experienced probate and estate planning attorney.
At Frank & Kraft, Attorneys at Law, our experienced probate attorneys can help to ensure that your estate planning efforts cover all your needs. The fact is that a simple will can never even begin to address all the complex issues that the average person needs to resolve with any estate plan. And while asset distribution is an important concern, other important issues can be even more vital when it comes to securing assets and protecting your long-term interests. We’ll work with you to ensure that you have the tools you need to protect the people you care about the most. To find out more about how proper estate planning can benefit you, call today at (317) 684-1100, or contact us at our website.
Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work.