There are many different estate planning tools that can be used by people who want to control the legacy they will leave behind when they pass away. While people tend to be most familiar with a last will and testament, this is not the best tool in many situations. While you can make a will a part of your estate plan, there are downsides to a will that don’t exist with other estate planning tools you may want to incorporate into your plans.
Parman & Easterday can help you determine what estate planning tools should be a part of your plan. We can explain to you the ways in which a will falls short and can guide you through the process of using other tools that may be more effective in achieving your goals.
Give us a call to find out more about how an Oklahoma City estate planning lawyer can help you move beyond wills and make a more comprehensive plan. By using other tools, you could avoid some key downsides of wills, including these disadvantages that a last will and testament has compared with other alternatives.
Assets Must Transfer Through The Probate Process
One of the biggest downsides to a will, as compared with a trust, pay-on-death accounts, joint ownership and various other tools, is that assets bequeathed to heirs or beneficiaries in a will must pass through the probate process. Probate is a time-consuming and costly process, with Investopedia estimating that probate expenditures could total around three to seven percent of an estate’s value.
Heirs may find it financially difficult to wait for an inheritance while the probate process runs its course, which could take a year or longer. If they are counting on the inheritance because the family breadwinner has passed away, they could face serious financial hardship. This problem could be avoided if other estate planning tools are used that allow assets to transfer more quickly.
Wills Don’t Protect Your Assets In Case Of Incapacity
If you create a will, it determines who inherits your assets when you pass away. It does not provide any protection for your assets near the end of your life should you become sick and unable to manage your own wealth. An alternative option, a living trust, allows you to transfer assets outside of the probate process and allows you to name a backup trustee who could immediately begin managing your trust assets if you were not able to do so due to illness or injury.
A Will Doesn’t Give You Control Or The Ability To Account For The Needs Of Heirs
When you make a will, you name who inherits, but you have little to no control over what happens next. If you give money to an heir, that heir could spend it as he wants or could potentially lose it to creditors or in a divorce. If you provide funds to someone who is underage, the court may have to appoint a guardian for the money and the guardian will have to keep an accounting of how the money is spent. When the child turns 18, the remaining money will be given to him with no strings attached. A will can create what is called a “testamentary trust” after you are gone, but this is less effective than the other alternative.
A trust allows you much more control. You could create a spendthrift trust to provide protection for the inheritance you leave a loved one who is bad with money. You could create a trust for a minor and select who manages the assets and even set special conditions or rules for giving the inheritance to a young person. For example, you could specify the child won’t inherit until graduating from college or getting married. This gives you much more flexibility to protect your heirs or beneficiaries.
Getting Help from An Oklahoma City Estate Planning Attorney
Parman & Easterday can assist you with the creation of pay-on-death accounts, living trusts and other trust types. An attorney can also help with structuring assets through joint ownership and other estate planning tools.
Our legal team will guide you through selecting the right techniques to protect your family and legacy, no matter what your situation. Give us a call today at (405) 843-6100 or contact us online to find out more about how we can help with your estate planning process. You can also join us for a free seminar to learn more about the different components of an estate plan and how a plan could work for you.