You have a will in place. You think that you have fully protected your family when you die. You may be surprised to discover exactly how many things wills can’t do. While wills are useful and inexpensive legal documents for many people seeking a quick and easy way to do their estate planning, they are often ineffective in many respects.
Here are some of the many things that a will can’t do:
- Reduce estate taxes – If you expect your estate to owe estate taxes (your lawyer can help you figure out if you’re in this category), a will won’t help you avoid estate taxes. You will need a trust to reduce or postpone estate taxes.
- Avoid probate – Property left in a will to heirs spends many months tied up in probate court. A will doesn’t avoid probate.
- Leave some types of property – If you want to leave your heirs assets from the proceeds of a life insurance policy or a retirement or investment account, you need to execute beneficiary designation forms. These forms supersede instructions in a will. Moreover, if you own property jointly with someone else, you can’t distribute that property in a will.
- Provide for special needs care – A will won’t properly provide for someone with special needs or long-term care needs. Instead, you must establish a trust or invest in a life insurance policy.
- Provide for pets – Pets can’t legally own property, so you can’t leave your property to your pet in a will. You can, however, designate a person to take care of your pet and you can leave your designee money to provide for the pet. In Tennessee, you can also set up a trust for your pet.
If you have a will and need any of these protections, consult with an experienced wills and trust attorney to determine the best estate planning documents for you.