Estate Planning Myths and Misconceptions: A Will is All You Need

When I meet with prospective clients, virtually every one of them tells me they need a will.  The prevalence of this belief is not surprising when you consider that wills are one of the few estate planning tools most people have heard of.  Nevertheless, the need for a will is not universal.  Some people need one, some don’t, and most everyone needs additional planning documents.

I don’t mean to imply that wills are bad.  Far from it.  A will allows you to specify “who gets what” when you pass away, choose a personal representative to settle your estate, and name a guardian for minor or disabled children.  On the downside, a will must go through probate, which can be costly, time-consuming, and lead to delays in your heirs receiving their inheritances.  For some people who own certain assets, beneficiary designations, co-ownership, or trusts are a more efficient and cost-effective approach to asset distribution after death.

This brings us to another dilemma: Wills only take effect after you pass away.  Maintaining control of your affairs while you are alive—which is one of the many benefits of proper estate planning—requires additional legal documents, including:

Health Care Proxy
A health care proxy allows you to designate an “agent” to make healthcare decisions for you in the event of incapacity or if you are otherwise unable to speak for yourself.

Durable Power of Attorney
Similar in concept to a health care proxy, a durable power of attorney lets you appoint an individual to handle your financial and other affairs if you are unable to do so yourself.

HIPAA Authorization
This document allows you to specify who has access to your medical information (and who does not).  Without a HIPAA authorization, your loved ones may not be able to get information about your condition in an emergency.

In addition, you might want to consider one or more trusts if your goals include controlling when and how heirs receive assets, avoiding probate, protecting assets from long-term care costs, and more.

So, is a will really all you need?  Probably not, but the answer depends on your specific circumstances and planning goals.  As always, I’m here to help you make a wise decision.

Until next time, take care….