June 16, 2017
A Last Will and Testament Only Based Plan provides the simplest and least expensive approach for estate planning. Rarely an adequate plan by itself, this Will Only Plan provides more protection and control than no plan at all. However, this limited approach does not address issues of incapacity nor does it avoid probate. That said, it is still worth considering as a first step to estate planning, so our estate planning attorneys have provided guidance on some of its advantages and disadvantages.
Advantages of a Last Will and Testament Only Based Plan
A Will based plan is less expensive during lifetime to set up. That’s a real upside, especially for young couples or families.
A notable downside of the Last Will and Testament Only Plan is that it will normally result in higher costs and fees following death. This is due to a need for probate.
Given its simplicity, a Last Will and Testament Only Plan can increase the risk of litigation between unhappy heirs. This plan does not provide sufficient structure to ensure that posthumous disagreements about the allocation of an estate will be avoided.
Who Might Set Up a Will-Only Based Plan?
Often younger healthy clients, who want to spend as little as possible now, will set up a Will only plan. They see death as less imminent than our older clients. They worry less about the likelihood of disability or mental incompetence. As a “just in case something happens”, a Last Will and Testament Only can provide a plan and direction upon death, even if less than perfect.
More generally, a client whose assets are insufficient to require probate or have beneficiaries named on most assets, may want a Will to confirm these desires, and to distribute tangible personal property. There can be downsides to this approach, unless family members get along well, there are multiple beneficiaries, or an “heir” is being cut out.
Admittedly in some circumstances, a Will can work in conjunction with beneficiary designations, including a Transfer on Death Deed where there is a house or other Wisconsin real estate. This approach offers a more frugal alternative to a Revocable Trust based plan.
Disadvantages of a Will Only Plan
A Will Does Not Avoid Probate
It is important to note that a Last Will and Testament (Will) based plan does not avoid probate. In some circumstances, it can work with beneficiary designations to limit or avoid probate, but a Will itself does not avoid probate. (For more information about probate, see our article about our work as Wisconsin probate attorneys.)
A Will sets forth who is to receive assets upon death, and who you nominate to be the personal representative. The personal representative is a court appointed person or bank, in probate, charged with overseeing your probate estate administration.
For clients with young children, often a Trust is created within the will for those children. However, this type of trust does not avoid probate. It creates more work after death, to deal with the probate and trust process through the courts. However, if the primary concern is keeping costs low now, this can the best option given the circumstances.
A Will Should Coordinate with Other Items
Although a Will details how assets will be divided, it normally does not override the beneficiary named in specific assets. For example, if you name Bob to receive assets under your Will, but name Jane as a beneficiary on an IRA, it will normally be Jane who will receive the IRA. The Will does not have the power to override the previously assigned beneficiary of the IRA.
In addition, if there is a Trust in a Will, the beneficiary designations must be coordinated with the trust. Failure to coordinate may results in assets not being passed along as detailed in the Will. For example, if there is an IRA that does not specifically name the Trust, then the IRA might not be passed onto your young child through the Trust. Updating beneficiary forms and coordinating assets, is often required to make an estate plan work as intended.
Even the simplest Will plan requires some work to make sure that assets coordinate with the Will plan. This coordination and review of assets is an important step to prevent problems, unintended results, and potential post death litigation.
Determining the Right Plan
The lawyers at Wokwicz Law Offices have decades of experience drafting detailed plans for people in and around Kenosha. We invite to you to contact us today to set up a time to discuss your circumstances.