What Is The Function Of A Will? Should It Be A Part Of Every Estate Plan?
There is no downside to having a will. A will provides the opportunity to set forth final wishes concerning assets. It allows a person to be assigned as a trusted individual to manage the deceased’s affairs, and it can also identify guardianship over children. A will determines custody if children are still under the age of 18, and if both parents were no longer living.
Are There Any Limitations To A Will? Is A Will On Its Own Enough?
A will has no impact on non-probate assets so long as a payable on death beneficiary/beneficiaries have been identified. Non-probate assets include bank accounts, life insurance, 401k plans, and IRA plans. These assets identify beneficiaries on a beneficiary designation form, listing them as the people who will receive those assets after the death of the person who originally owned them. The financial institutions and the insurance companies have a contractual obligation to pay the beneficiaries upon the presentation of a certified copy of the deceased’s death certificate. Non-probate assets pass outside the will and are not subject to any language that’s contained within a will. However, if there is no beneficiary designation form, then the default beneficiary is the estate, and those assets would then pass through the estate.
What Are Some Other Essential Components Of An Effective Estate Plan?
Typically, an estate plan includes a will, power of attorney, medical power of attorney, medical directive, HIPAA authorization, and children’s medical power of attorney – if children are minors, and in certain circumstances, a declaration of guardianship. All of these documents, except for a will, apply during a person’s lifetime. After an individual passes away, these documents are no longer valid. These documents determine your wishes while still living. A proper estate plan should manage all the essential documents and assets while a person is still living and after they pass away.
How Can I Legally Protect My Assets From Possible Incapacity, Should That Occur Within My Lifetime?
The best way to protect your assets in the event of unexpected incapacity is to have a power of attorney and medical power of attorney in place. If you are incapacitated, having someone you trust to make the right decisions on your behalf concerning your assets and health is crucial. Your power of attorney and medical power of attorney are empowered to take care of your finances and make medical decisions on your behalf. If powers of attorney have not been identified, the court may have to appoint a guardian.