Many people believe a will protects from having your loved one’s estate probated but this is not true! Having a will REQUIRES the estate to be probated. Read below to find out more about why a will IS NOT sufficient estate planning.
I have a will, so my family will avoid probate when I pass. Unfortunately, this is not true. A will REQUIRES your property to go through probate after you pass. Probate is the legal process through which the court makes sure your assets are distributed according to the instructions in your will. A will is a set of instructions to the probate court and only works if there is a probate.
I DON’T have a will, so my family will not have to go through probate. If you own assets in your name and you don’t have a will, the state in which you live will require your estate to be divided through the probate court. Also, the laws in most states allow for the inheritance of property only by bloodline or marriage, so an unmarried partner or close friend would not receive anything.
If I become incapacitated, my executor will be able to handle my financial affairs. Unfortunately, any instructions in a Will are ignored if you become incapacitated. That’s because a will can only go into effect after you pass; it is of no use before then. Unless you have established Power of Attorney documents, the court will likely appoint an individual to take control of your assets and your care if you become unable to conduct business. This person is commonly referred to as a guardian, and the court will continue to supervise the actions of the guardian.
Joint ownership is a good way to avoid probate. Joint ownership with right of survivorship (the most commonly used form of joint ownership) allows the jointly owned asset to transfer automatically to the other joint owner when one owner passes, without probate. However, if both owners pass simultaneously or if the surviving owner does not add a new joint owner before he or she passes, the asset will have to go through probate before it can go to the heirs. In most cases, joint ownership merely postpones probate.
I don’t need to do any estate planning because I own much less than the federal estate tax exemption. Don’t confuse estate planning with estate tax planning. Estate planning is about making sure your assets will go to the people you want to have them with the least amount of delay and costs. Good estate planning also includes a plan for incapacity. This is something everyone needs to do, regardless of the size of your estate.