A Will Is a Key Component of Any Estate Plan, but It’s Not Enough, Continued

Last will and testament paperwork

Another reason a will isn’t enough, is that the ownership of many assets often transfer outside the will, including life insurance, annuities, retirement accounts like IRAs and 401(k)s, jointly-owned property and more. The beneficiary designations of these assets, not the will, determine how they will be distributed. Many IRS rulings and court cases have concluded that the owner’s statements and intent in his or her will do not matter if they contradict what was written on the beneficiary designation form. This is why it is so important to review your beneficiary designations periodically to ensure they reflect your wishes now, not what you wanted when, for example, if you opened the IRA 20 years ago.

Many families utilize trusts in their estate plans. These provide a greater level of protection and flexibility than what a will alone can provide. For instance, a revocable living trust allows your estate to avoid probate entirely—and the public scrutiny that accompanies it. Trusts can also protect your assets against creditors and other threats. In addition, they can protect your heirs’ inheritances against creditors, predators, remarriage, and even their own poor decisions if they are not yet mature enough to handle an inheritance on their own.

The bottom line is this: while a will can help you accomplish important goals, additional planning tools and strategies can help you accomplish a great deal more, both while you are still alive and after you have passed away. 

Please contact us today to schedule a time to discuss your estate planning needs. 

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