In advanced estate planning, tax advisors help high-net-worth clients identify the most effective strategies and tools for transferring their assets.
Sometimes called inheritance planning or complex estate planning, this process helps to secure your loved ones’ future and ensures that your wishes become reality at (and before) the end of your life.
But estate planning also has another purpose: wealth preservation. In other words, an advanced estate-planning specialist can help you achieve your goals for asset distribution while ensuring that you legally preserve as much of your wealth as possible.
So how does a will — a last will and testament, that is — fit into this process?
Wills are an interesting topic. You know you need one. But what might you not know about wills?
No. 1: Wills Are Only a Snapshot in Time
When you prepare a will, it reflects your personal, professional and financial status at that moment. If anything changes in your life — you get married or divorced, have a child, etc. — you must either revise your will or start anew.
No. 2: Addresses the Who and the What, but Not the How
You can specify in your will what assets go to which heirs, but you cannot typically choose how they will be transferred. It’s safe to assume that the method of conveyance will be the one that can be taxed the most.
No. 3: Wills Become a Matter of the Public Record
Upon your death, your will becomes a matter of public record as soon as it’s filed for probate. This means that anyone can see who inherited what. Not only does this present a privacy concern, but it also creates risk for heirs who may become the target of financial predators.
No. 4: Wills Can Be Contested and Potentially Thrown Out
No matter what exclusionary verbiage you may insert, you will can be contested and thrown out by the court. In that case, your assets will be distributed based on your state’s laws for those who die intestate (without a will).
No. 5: Subsequent Wills & Codicils Can Come Back to Haunt You
Any disinherited person who was mentioned in a prior will or codicil (amendment to a will) is eligible to contest. The odds of them succeeding aren’t great, but it does happen. And even if they fail, the legal wrangling could become unpleasant for your family.
No. 6: Wills Do Not Supersede Titling & Beneficiary Designations
Investment and brokerage accounts, life insurance policies and similar artifacts all have designated beneficiaries – hopefully the beneficiaries you have designated. We have seen many cases where clients forgot to change beneficiary designations to the name of a second spouse—creating a multitude of financial problems, but none that a legal system can fix.
Your will does not supersede those designations as they are a contract with the bank, insurance company, or brokerage. In many cases, your will also does not supersede the titling of real property.
No. 7: Wills Don’t Govern Incapacitation
If you become incapacitated and unable to make decisions, your will won’t help. The will only becomes effective at your passing. If you think there’s a chance you’ll spend some time getting older or are unlikely to die instantaneously, you’ll want to discuss a Durable Power of Attorney for financial matters.
As a side note, your will is also not the right place to specify your wishes for your funeral and interment. It likely won’t be read until those events have already taken place.
Maybe you knew some of these interesting facts but there’s a good chance that others gave you pause. There’s also a good chance that you may want to revisit your will and consider using other vehicles – trusts, for example – to achieve your goals.
At Cantley Dietrich, our complex estate planning strategies are elegantly designed, to assist you in legally – and privately – accomplishing your goals for asset transfer and wealth preservation. Contact us today to learn more about how our advanced estate planning services can help you.
NOTE: This article is for informational purposes only and should not be construed as providing legal advice. Use of this site does not create an attorney-client relationship. Contact an attorney to obtain legal advice.