Misconceptions about Wills

Based on my experience, there is a common misconception that if you have a Will created, it is enough to ensure that your assets will pass on smoothly to your heirs. There is a process called “Probate”, however, which involves the State making sure that a Will is valid before it can be used to distribute your property according to your wishes.

In fact, a Will is simply a tool of the Probate system. I would equate it to an instruction manual which explains to the Probate Court how you would like your estate divided. The Probate Court system must then make sure that all your property is collected and appraised, and all your bills and taxes are paid, before they can distribute your property to your heirs.

Is Probate expensive? It can be, if a Will is not clear in its instructions, or if there is doubt as to whether it’s a valid Will (especially if it’s one that was homemade, and not signed and verified by proper witnesses). The longer it takes the Probate Courts to go through the process, the more legal fees your estate will typically incur.

However, there are ways to simplify the Probate process, and sometimes even bypass it with a significant portion of your assets (though it can never be bypassed entirely). Bank accounts, IRAs, Life Insurance, and other investments with listed beneficiaries do not have to go through the Probate process and can be directly passed on to your heirs. Even your checking or savings account can have a “Transfer on Death” instruction which will allow your funds to be passed on directly to your beneficiaries, ensuring that funds are available should they need them to help with expenses during the Probate process.

In addition, when correctly set up, Irrevocable Trusts are another way to not only bypass the Probate process, but keep assets out of your estate and avoid taxation. Unfortunately not all Trusts are created alike, so it’s important to have the right kind of Trust in place. Also keep in mind that some tools might help avoid Probate, but not Estate Taxes, and vice-versa, so all aspects of a plan should be reviewed.

Wills and Trusts are an important first step when creating your Estate Plan, but there are many other strategies that can be deployed to ensure that your hard-earned savings are passed on to your loved ones as quickly and wholly as possible. End-of-life planning is never fun, and it’s easy to put off, but ask yourself this – would you rather give your money to your family or to Uncle Sam?

Talk to your advisor and make sure your Estate Plan is put in place—today!