AARP and The Red Cross Celebrate Make-A-Will Month, But Here’s What They Didn’t Tell You
Why Creating a Will is Only the First Step in Estate Planning
August is National Make-A-Will Month, and you might have seen advertisements from AARP or the American Red Cross encouraging you to create a Will. Both organizations promote FreeWill.com, a website claiming to help you create a legally valid Will in just 20 minutes.
A Will is often the first document that comes to mind when thinking about getting your affairs in order. However, the guidance from AARP and the Red Cross during National Make-A-Will Month may inadvertently leave your family with complications when you pass away or if you become incapacitated.
Understanding the Role and Limitations of a Will
To grasp why relying solely on a Will might be insufficient, it's important to understand what a Will does and its limitations.
A Will Does Not Cover All of Your Assets
While advertisements might suggest a Will can handle all your posthumous needs, it only applies to certain types of property, specifically those solely in your name without a beneficiary designation.
For instance, a Will does not govern jointly owned property or assets with designated beneficiaries, like retirement accounts or life insurance policies. These assets transfer directly to the named beneficiaries, bypassing the instructions in your Will. Thus, keeping beneficiary designations up to date is crucial.
A Will Is Ineffective if You Become Incapacitated
A Will has no legal power while you are alive, meaning it cannot grant anyone the authority to manage your affairs if you become incapacitated. This situation could result from an accident, illness, or injury.
To ensure someone can handle tasks like bill payments, asset management, and medical decisions on your behalf, you need a Power of Attorney and healthcare directives. Without these, your family might need to undergo a court guardianship process to obtain the authority to care for you.
A Will Requires Probate Court to Be Executed
A common misconception is that having a Will avoids the need for court involvement. In reality, a Will must be filed in probate court to take effect. Your appointed representatives only gain the authority to manage your assets and follow your wishes once a judge formally grants them power.
Probate can be lengthy and costly, often taking 12-18 months or longer and potentially costing your family tens of thousands of dollars. Additionally, because probate is a public process, your Will becomes part of the public record, exposing your estate details to potential scammers.
A Will is Not an Estate Plan
Organizations often emphasize the importance of creating a Will because it's a familiar tool. However, a Will is just one component of a comprehensive estate plan.
An estate plan encompasses strategic decisions about asset allocation and includes various legal tools such as Trusts and Powers of Attorney, tailored to your specific circumstances and local laws. More importantly, an estate plan should include an inventory of your assets so your family knows what you have, where it is, and how to access it when needed.
Comprehensive Estate Planning: More Than Just Documents
While online programs can provide legally valid documents, they often lack the personalized guidance and strategic planning required for an effective estate plan. Documents alone may not work as intended without the expertise and counseling of a professional who understands your unique situation.
Taking the Next Step in Estate Planning
To ensure your estate plan truly protects your loved ones and aligns with your wishes, consider working with a professional who can guide you through the process. A complete estate plan should evolve with your life changes and provide clear instructions for managing your affairs, both during your lifetime and after your passing.
If you’re ready to see how a comprehensive estate plan can protect your loved ones and your legacy, consider scheduling a consultation. This will allow you to review your assets, discuss your wishes, and develop a tailored plan that ensures your family is taken care of when you cannot be there.
This article is a service of Zarda Law, S.C. We do not just draft documents; we ensure you make informed decisions about life and death, for yourself and the people you love. That's why we offer Legacy Planning Session, during which you will get financially organized and make all the best choices for the people you love. You can begin by scheduling a Legacy Planning Session and mention this article to find out how to get this $750 session at no charge.
