A will is usually the first thing people think of when they hear the phrase “estate planning.” While a will is generally the simplest form of estate planning, it does not do what most people think it can. Often, a will drafted with an attorney or using an online or DIY form does not do what the drafter thought it would when he or she put it together.
So, What Does a Will Do?
Basically, all a will does is communicate your intentions to the probate court. The will is referred to probate court, where a judge will place the will on public record, open it to public challenges, and then determine whether the will is valid and enforceable. Based on the preferences stated in the will, the probate court will assign an executor who will be responsible for enacting the bequests provided in the will.
This probate process, depending on the size of the estate, can take anywhere between six and eighteen months. This is time that the assets contained in the estate are tied up and cannot be accessed by the beneficiaries. The probate process also costs approximately 3-5% of the total value of the estate between attorney’s fees, court costs, and filing fees.
If a will is the only estate planning instrument executed, then the entirety of the deceased person’s estate will have to pass through this probate process. In addition to being time consuming and expensive, the probate process is also public. The will is published in the public record and can be viewed by anyone.
What Doesn’t A Will Do?
A will does not provide any protection to the estate assets or take any special circumstances into account. If any of the following circumstances raise a concern for you, then you may want to take additional estate planning steps beyond drafting a will.
It Does Not Authorize Beneficiaries to Take Ownership of Anything On Its Own
Without the probate court process, the will is nothing more than a piece of paper. Beneficiaries named in a will cannot simply take the will to the bank and expect to take funds out of an account. On its own, the will has no legal force. In order to enact the terms stated in the will, a probate court will have to complete its process and the executor will ensure that the terms of the will are carried out.
It Does Not Become Effective Until After Death
Because a will is an instrument made effective by your death, a will has no legal force during your lifetime. Therefore it is not used to replace a healthcare directive or power of attorney. In the unfortunate circumstance that you become incapacitated and need someone you trust to be able to make medical decisions, make any financial transactions, or take temporary guardianship of your minor children, you will need a document other than a will to state your preferences.
It Does Not Supercede Any Other Methods of Distribution
If you have any bank accounts, insurance policies, or retirement plans for which you have designated a beneficiary, these beneficiary designation forms will control over any transfers made in a will. The same goes for any property that you may hold in joint tenancy with the right of survivorship. If you transfer the property to someone else in your will, the joint tenancy will control.
A will also won’t take back control of any assets you’ve placed in trust. If you fund a trust, whether a revocable or irrevocable trust, with assets that you also distribute in your will, the trust documents will control because an irrevocable trust cannot be changed and a revocable trust becomes irrevocable upon your death.
It Will Not Take Immediate Effect
Because a will is often not found or read until after the funeral and because it does not go into effect until an executor has been appointed by the probate court, do not use your will as a mechanism to leave funeral instructions. If you want to leave instructions regarding funeral arrangements, put these in a separate document and tell a trusted family member or friend where to find them. The same goes for any immediate costs that may arise from your death. Because assets left in a will take some time to reach the final beneficiaries, a will cannot release funds for immediate costs such as funeral and medical expenses.
It Will Not Allow for the Long-Term Management of Assets
A will is not the proper tool for managing assets long-term. This includes providing for a loved one’s long-term care. A will is also not meant to be managed long-term, like a trust, because it closes once the will has been satisfied. For this reason, a will should not have contingent bequests. Any conditions will be too difficult to enforce after the will has been satisfied. If you want to provide for a family member with special needs, put conditions on any bequests, or leave assets to children or pets, do not do so in a will. A trust is a better mechanism for the long-term management of assets.
It Does Not Shield Your Assets from Creditors
When a will goes through the probate process, one of the things that court will do is leave time for creditors to come forward and make claims against the estate. The court will then determine if these debts are legitimate and pay creditors first out of the estate assets before making distributions to heirs. If the debts are more than the total value of the estate, there will be no distribution made to heirs.
Does This Mean I Shouldn’t Write a Will?
The will’s limited role does not mean that it shouldn’t be a part of a comprehensive estate plan. While a trust or other form of distribution may be useful to transfer assets that are shielded from creditors, that allow for long-term management, and that avoid probate, there may be some assets that will remain. These assets can be transferred in a “pour over” will, which is a document that catches all other assets that are not transferred outside of probate.
A will likely does have an important place in your estate plan, but it should not be relied upon for your major, most important bequests.
Ask For Help From An Atlanta Asset Protection Attorney
If you would like to learn more about asset protection, start by calling our office in Atlanta at (770) 933-9009, to schedule an appointment with our lead estate planning attorney.
