You have a Last Will and Testament. All your assets will be managed and disposed according to your wishes, right? Probably not. People often misunderstand what a will does which can have a big impact on how assets are managed and disposed of for you and your family.
- The Will is Only Effective Upon Death
Your Will directs your Personal Representative on how to conclude your final affairs and to whom to distribute assets upon your death. However, the Will does not dictate how your assets will be used if you become incapacitated and you can no longer manage assets yourself. For this purpose, you need other legal documents such as a Power of Attorney or Trust.
- The Will Does Not Give Anyone Authority to Make Health Care Decisions for You
If you become incapacitated, a Health Care Representative will make health care decisions for you. Unless you have appointed a Health Care Representative in writing or executed a Health Care Power of Attorney, a team of individuals designated by state law will make health care decisions for you. As this team may not be those you would want in a position of making health care decisions and can lead to conflicting decisions, you should appoint a Health Care Representative in writing or execute a Health Care Power of Attorney.
- The Will Typically Distributes Only a Portion of Your Assets
Your Will determines how your probate assets are distributed. The Will does not direct the disposition of joint assets or assets with a beneficiary designation. Life insurance policies, IRAs, or other assets with beneficiary designations will be distributed to the persons listed on the beneficiary form no matter who is designated beneficiary under your Will.
Executing a Last Will and Testament is a beginning step to planning, but is a small cog in a comprehensive plan. Other documents are necessary to ensure your team has the authority to act for you when the time comes and that assets are divided among those you truly desire and in the proportions you want. Without a complete plan, your needs could go unmet or your loved ones may be forced to proceed with an expensive, time-consuming process to obtain a guardianship through a Court. Furthermore, an incomplete plan can result in unanticipated, unequal distribution of assets at your death leading to hurt feelings or a family left in turmoil. To design a comprehensive estate plan crafted specifically to meet your goals, contact us today. We can assist you in preparing a plan that contains everything you and your family need to provide peace of mind and future protection.
Jeff is Certified as an Elder Law Attorney (CELA) by the National Elder Law Foundation, a distinction held by only a handful of lawyers in Indiana. For almost 20 years, he has focused on elder law, estate planning, long-term care planning, Medicaid planning, Veterans Affairs benefits planning, special needs planning, guardianships, and estate administration.