Wills are a wonderful way of addressing the needs of loved ones in estate planning, but not all wishes can be carried out by your will.
What a will won’t do includes the following:
Bequeath Certain Kinds of Assets or Property. You cannot use your will to leave:
- Property that is in the living trust
- Life insurance policy proceeds that has a beneficiary in it
- Money in the retirement plan that has a beneficiary indicated in its forms
- Stocks or bonds held in beneficiary and has transfer-on-death (or TOD) form. If you want to change the beneficiary, contact the brokerage company
- Money in a payable-on-death bank account
- Joint tenancy. Leaving a property that is co-owned with someone else automatically transfers the entire property to the surviving co-owner. Your share that was indicated in your will can only go to a beneficiary if all owners of the property die simultaneously.
Direct Funeral Arrangements
It would be wise to make separate documents regarding your wishes and inform your executor its location when needed. It sometimes takes days or weeks for a will to surface after death, and memorial services or wishes indicated may not be executed.
Reduce Estate Tax
Having a will won’t help evade taxes. If you are expecting your estate to owe federal taxes, start taking steps to decrease your tax liability. In terms of tax bills, there are many trusts that can reduce or postpone it.
Establishing the validity of a will can take months to years of being tied up in a probate court before final contribution of the property commences.
Apply Certain Conditions on Gifts
A gift that is awarded via a will should not contain condition attached like contingency on marriage, divorce or change of religion of the receiver. You can only include lesser influences, like leaving money for a certain person when they go to college. Making conditional gifts can sometimes open a can of worms because questions will arise as to who will enforce the will’s condition and for how long.
Leave Money for Illegal Purpose
This is a rare situation, but you cannot allocate money for use on something illegal.
Arrange to Care for a Special Need Beneficiary
Long term care for someone with special needs will be better off in a trust that is tailored to the person’s needs. It will not jeopardize government benefits, and can provide extra income for the person and their family that can be used in their care.
Leave Money to Pets
Pets should be left to new owners who will take care of them. Leave the money to new owners to help with your pet’s related expenses. Pets cannot own property, so leaving property directly to them is not a good idea. Trusts are allowed in some other states, but won’t be necessary if you have confidence in the person whom you left your pet(s) with after you pass away.
Source: 1-2-Law: https://www.12law.com