Deciding to start the estate planning process is an essential step in ensuring your loved ones are cared for once you are gone. An estate plan allows you to decide how your assets are divided following your death. It also makes things easier for your beneficiaries to know how you want your estate handled. However, as you start working on your estate plan, choose the right estate planning methods. Many people believe all they need to do to create their estate plan is draft a will. This may not be the case.
Wills are a simple and inexpensive way to distribute your assets and possessions following your death. Indeed, they are a key component of any estate plan. However, a will by itself can't do everything. There are some types of property that can't be transferred in a will. This means that creating a will may not be sufficient depending on what you are trying to accomplish. Here is a look at answers to frequently asked questions we receive about what a will can and cannot do.
Is There Any Property You Can't Transfer in a Will?
When creating an estate plan, remain aware of what kinds of property can and cannot be transferred through a will. For instance, you cannot gift property that is owned in joint tenancy with someone else. Indeed, this type of property automatically transfers to the surviving owner upon your death. You also cannot gift property for which you've already named a beneficiary. For example, a life insurance policy, a pension plan, or a 401 (k). Similarly, any payable-on-death bank accounts for which you've named a beneficiary cannot be transferred using a will. Your estate planning attorney helps you determine what property your will can and cannot include.
What if I Want to Leave Money to My Pet?
Many people consider their pets close as family. Thus, they want to do everything in their power to make sure that their furry friend is cared for once they are gone. However, pets cannot own property, so they cannot inherit money directly from you in a will. If you are concerned about who will care for your pet once you are gone, leave your pet to someone you trust. Then, you can leave that person with some money to help them out with care-related expenses.
Depending on the state you live in, you may also have the option to set up a trust for pet care. You can enable the person you name as trustee of the pet trust to use these funds to care for your pet during their lifetime.
Can I Leave Funeral Instructions in My Will?
While it is possible to include funeral instructions in your will, the problem with doing so is that wills often aren't read, or even found, until days or weeks after a person's death. This often makes funeral directions left in a will of little use to your loved ones. If you have specific wishes for how you want your body and memorial service handled following your death, you are better off creating a separate document spelling out your wishes and telling your executor where they can find it once you are gone. Better yet, ensure your wishes are followed by working with a funeral home.
How Do I Put Conditions on a Gift?
It is not uncommon for people to want to make gifts to beneficiaries contingent on certain conditions. For example, requiring a loved one to go to rehab or finish college before they can benefit from the estate. However, conditions like these are often difficult to enforce using a will, as assets are distributed soon after your death. If you want to make gifts in your estate plan that are contingent on pre-determined conditions, it is usually easiest to do so using a trust. This way, it will be up to your trustee to decide if and when funds should be released. This would allow you to leave gifts to loved ones with specific conditions attached. For example, giving your grandchildren a sum of money once they graduate college.
Can a Will be Used to Make Arrangements for a Beneficiary With Special Needs?
If you have a loved one with special needs who you want to ensure is provided for once you are gone, you will need to consider setting up a trust for this purpose. The fact is that a living will isn't going to allow you to make the proper arrangements for your loved one. However, a special needs trust that's tailored to the needs of the beneficiary will ensure your loved one is taken care of. Creating a special needs trust will also allow you to set aside money that can be used for the care of your loved one without jeopardizing any government benefits they may have. It is important that you work with an experienced estate planning attorney to ensure that the trust you create takes proper care of your loved ones.
Use a Probate Lawyer or an Estate Planning Attorney to Execute Your Will
While a living will is an essential component of any estate plan, there are limitations to what it can do. This is why it is essential that you work with an experienced estate planning attorney. They help you determine what you need to include in your estate plan in order to meet your goals.
Feel free to contact us to learn more about the estate planning process.
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