Wills are one of the best-known estate planning devices. Forming a will can be an important step in getting an estate plan in order. However, wills cannot do everything. These documents have their limitations.
The main purpose of a will is for a person to direct how his or her assets will be distributed when he or she dies. So, wills are a powerful tool for individuals in making sure their wishes regarding their assets are followed when they are gone.
However, there are some assets wills do not control. For one, wills typically cannot direct the distribution of assets a person jointly owns with someone else. They will also generally not control assets that have a separate beneficiary designation, if that designation is used. Examples of things that typically have such designations are life insurance and retirement accounts. Also, wills do not control assets that have been put into a trust.
Additionally, wills only deal with what happens when a person dies. Another thing it can be important for people to plan for is what will happen in the event that they are incapacitated. This includes things like what will happen regarding their finances and medical care. A person ignoring these issues could leave his or her wishes out of the picture and significantly complicate things for his or her family if unexpected incapacity strikes.
There are other estate planning devices out there that, unlike wills, can address issues regarding incapacity. For example, people can use power of attorney documents to name a person who will manage financial matters for them in the event they become unable to do this themselves. On the health care side, medical power of attorney documents allow people to select a person to make health decisions for them in the event of incapacity and living wills allow people to express their wishes regarding what kind of medical care they do and do not want.
So, while wills can be a very important part of estate plans, it can be critical for individuals to understand the limitations of these documents and what kind of things need to be done beyond forming a will to achieve their estate planning goals. Skilled attorneys can help individuals with developing a comprehensive estate plan that addresses their needs.