A will is an important tool in your estate planning arsenal. Not only does it put control of the disposition of your assets in your hands, it can give your family clear instructions for what needs to be done upon your death. In short, a will is one of the best gifts you can give your family. However, a will is like any other document in that it can only do certain things and cannot do others. Here’s what your will cannot do.
1) Transfer certain property. The key to remember with a will is that it can only transfer property that is already transferable. In other words, if the property is not completely yours to begin with, it cannot go into the will. For example, real property like homes or land that is owned with another through joint tenancy – i.e. you own it together – cannot be transferred in your will to your heirs. At most, your portion of interest in the property is passed to the other owner so that they become full owner.
Other property that cannot be transferred includes property that is already in a living trust. Living trusts are designed to avoid probate – i.e. the disposition of the assets – altogether, so if a property is in a living trust, it will be transferred through the trust. Similarly, life insurance and retirement accounts with beneficiaries cannot be transferred through the will. They can only go to the designated beneficiary.
2) Plan your funeral. Since the will only gets truly examined after the funeral, funeral instructions you put in your will probably not even be seen until after your funeral. The better course is to make your wishes known to your family ahead of time so they have an idea of what you want.
3) Get you out of estate taxes. One of the main goals of estate planning, of which wills are a major element, is tax avoidance and maximizing the inheritance that is passed on to your heirs. Wills, however, are not designed to provide any type of tax benefits. They are solely designed to designate how property is to be divided or distributed amongst your heirs. Trusts, another form of estate planning, are specifically designed to take advantage of tax provisions and avoid certain taxes.
4) Get your estate out of probate. Probate is the process by which your will is administered by the court. Many people aim to escape probate as it is time consuming and involves a public entity, the court, in private matters. Wills, however, are required to be probated. So, if you want to avoid probate, a will is not going to do this. A trust, on the other hand, is designed to avoid probate and the long drawn out proceeding that it can become.
5) Absolutely direct how a gift is to be used. A bequest in a will that requires someone to marry, get divorced, or convert religions as a condition of receiving the gift is unenforceable and will be ignored by the court. This is not to say that you cannot direct how you want a gift to be used, it’s just that it may end up being more of a suggestion than a directive.
Estate planning is an important exercise for everyone to do, no matter their stage of life. Having a qualified and experienced attorney assist in your estate planning is the best way to ensure that your planning is tailored to your specific situation. The attorneys at Michigan Gun Law offer these services and many more. Contact them today to get started.