Many clients come into our office saying “we just need simple will.” They often tell us that they do not have many assets aside from their home and perhaps the fear is that a more complicated estate will lead to higher legal fees. The truth is that most people looking for a simple solution to estate planning underestimate the following factors that can result in a nightmare scenario for themselves and their heirs.
Probate is a court process of managing an estate that is public, expensive, and time consuming. Having a Will does not keep your estate from going into probate and in fact, probate courts are tasked with determining whether a will is valid. A revocable living trust is a great alternative that allows your estate to be managed more efficiently, at a lower cost and with more privacy than probating a will. A living trust will require a greater initial investment to establish, but will avoid a complex probate proceeding.
If you have minor children, you will want to nominate a guardian, but should also consider setting up a trust to hold property for those children. If both parents pass away while their children are still minors and they do not have a trust in place, the child’s inheritance could be held by the court until he or she turns 18, at which time the entire amount would be given to the child. Coming into an inheritance at a young age is a lot of responsibility to shoulder, even for the most conscientious 18 year old. Setting up a trust for your children helps to ensure that any money left to your child can be used for educational and living expenses and can be administered by someone you trust. You can also protect the inheritance you leave your beneficiaries from a future divorce as well as creditors.
Couples who have children from previous relationships should consider the consequences of having a simple will. The most common distribution in a simple will is for each spouse to leave everything to each other. In this scenario, when the first spouse dies, the second spouse inherits everything. If the surviving spouse later remarries and leaves everything he or she received to the new spouse or to his or her own children, they effectively disinherit their children from a previous marriage. This can be avoided with careful planning through a marital trust which would provide for children of both spouses.
Incapacity / Disability Planning
Comprehensive estate planning not only addresses what happens to your property after you pass away, but also how to deal with property and decisions while you are alive. Every few years, a high profile case makes the news where people failed to plan for disability or incapacity and the surviving family is left to publicly air their opinions about what you “would have wanted” had you been able to decide care for yourself. Setting up proper documents will designate someone you trust to handle your financial affairs and guide decisions about your medical care.
While the initial cost of a simple will or DIY estate plan may be cheap, the cost to your beneficiaries can be incredibly costly, both financially and emotionally. Contact our office for a consultation and we can provide valuable insight and offer effective mechanisms to ensure your wishes are carried out in the most efficient manner possible while providing protection and comfort for you and your loved ones for years to come.