A Last Will and Testament is an important document in developing an overall estate plan. However, in many instances, the general public thinks that this is all that is needed. In a small sub-set of the population, this may be true. So to help you determine if a Will is all you need, I have come up with some questions to guide your decision making:
- Do you want to see your family and/or loved ones go through the court process called probate? If “yes”, then a Will may be all you need. A Last Will is an instruction to a judge. In order for the judge to see and rule on it, a probate has to be opened. All Wills need to be probated.
- Do you like seeing larger percentages of your estate going to court costs, fees and attorneys? If “yes”, then a Will may be all you need. You can expect to pay between 3% and 8% of the estate’s value to get through probate.
- Do you enjoy paying taxes? If “yes”, then a Will may be all you need. There is no contemplation or protections in a Will for the various kinds of taxes – Income Tax, Capital Gains Tax and Estate Tax.
- Do you enjoy seeing your family and loved ones fight? If “yes”, then a Will may be all you need. Death and dying are not easy on the living, and when that is coupled with any sum of money, there is a stronger likelihood for the gloves to come off.
- Do you want to see your special needs beneficiary disqualified from their government assistance? If “yes”, then a Will may be all you need. Many government programs do not allow the person to have much assets. Even $5,000 can disqualify a person in some instances.
- Do you want to see your assets given to a new husband or wife? If “yes”, then a Will may be all you need. When your spouse or loved one continues with their life, and a new relationship is formed, the assets that you had earned may end up supporting that new “friend” and his or her family.
- Do you want to see your assets given to creditors or ex-spouses or just wasted? If “yes”, then a Will may be all you need. An inheritance through a Will is generally given outright to the beneficiary. So if that beneficiary goes through a divorce, gets sued or goes bankrupt, the inheritance is part of those settlements. Or the beneficiary could simply be immature, and squander the gift on frivolous spending.
- Do you want to see your family and/or loved ones go through the court process called guardianship/conservatorship? If “yes”, then a Will may be all you need. A Last Will is only effective on your death. So if you become incapacitated, the courts have to get involved to determine who will make financial decisions on your behalf, as well as medical decisions. Much like the probate at death, there are large costs involved, on top of the time and humiliation that surrounds these types of cases.
If you answered “no” to any of those questions, you should make an appointment today with one of our estate planning attorneys to see what other estate planning options are available to you.
Contributed by MH Albuquerque, Santa Fe and Las Cruces Estate Planning Attorney, James P. Plitz.
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This blog should be used for informational purposes only. It does not create an attorney-client relationship with any reader and should not be construed as legal advice. If you need legal advice, please contact an attorney in your community who can assess the specifics of your situation.