When planning for retirement, most people start thinking about first building up a certain amount of wealth, then having ways to transform that wealth into a comfortable few decades of not having to work. However, one thing few want to contemplate is the inevitable necessity of passing our remaining wealth to the next generation. For most people, the issue feels settled enough if you have life insurance and a well-written will. However, few consider the hassle that comes with following the traditional inheritance procedure. The will, in particular, comes along with a surprising number of rules and procedures. These were put in place to counteract forgery, but do very little to ease the experience of surviving loved ones.
Wills, Probate, and Publicity
Writing a will is an important step in planning for the unknowable and the inevitable. Having a will, even as young as your 20s, is practical if you have any amount of wealth or final wishes you would like to be dispensed in case of a freak accident or illness that takes you out early. However, the more wealth you accumulate and the more inheritors you’d like to include, the more complicated and problematic executing a will becomes.
The first thing to understand is that every will requires probate. This is a judiciary period of time in which the court takes possession of everything in your estate while it decides if your will is valid or not. This can last anywhere from a few months to a few years. During this time, your spouse, children, and other inheritors will not have legal access to your estate. This has been known to be devastating in cases where families could not access legal ownership rights to their home or to bank accounts that include much-needed funds.
Writing a will may be easy but probate itself is not free. Even if your named executor is willing to do their part without a fee, the court is not. Probate fees are taken out of your estate before your inheritors are paid. Any complications with probate will extend the court fees and the amount taken out of your estate. While simple will execution exacts minimal fees, the fees can balloon depending on how the execution goes.
If you have an interest in keeping your affairs, estate content, and inheritors private, a will isn’t your best option. Every legal will is made into a public record after it is accepted by probate court. This means that everything you own, pass on, and who you leave things to also becomes public record. If you have private sentiments or last wishes, these too will be made public.
Finally, because so many wills have been forged or forced, they are very commonly contested. Contesting a will expands probate fees because it increases the need to verify your will and it is reasonably possible to turn over a will or bully the court into making specific exceptions. If you have troublesome relatives in the background (and who doesn’t?) who might try to get more from your will than you wish to leave them, you may want an alternate solution.
Sometimes relying on a will alone to pass down your possessions and wishes simply isn’t ideal. In fact, because wills are such an old legal mechanism, there are several new methods of estate planning that are a significant improvement. The right one will depend on your circumstances and resources. Join us next time for the second half of this article. We’ll outline how a living trust can help eliminate every problem we’ve just described about passing on a large estate through nothing but a will. Thank you for reading and we hope to see you in part two. For more retirement and estate planning tips, guidance, and helpful advice please contact us today. We’re always ready to lend an ear and help new clients build the right plan for themselves and their families.