Some people may believe that all they need is a will to cover the various aspects of their estate after they pass away. Although relatively simple and easy to create, a will has its shortcomings. Several factors involving one's estate cannot be handled through a simple will.
One of the first, and probably most important, reasons people choose to create wills is so they can allocate their property, both real and personal, to those whom they trust. While wills can certainly express the final wishes of an individual on who will receive what property, certain types of property cannot be handled through a will. Any property that someone owns with another person and property held in a living trust will not be affected by the terms of a will. Likewise, property that already has a beneficiary named cannot be re-allocated through a will. Stocks, bonds, life insurance policies, pension plans and retirement accounts will all be allocated as designated on the account forms. Furthermore, with a will, any property designated to a beneficiary has to first go through probate, which can be a very time-consuming and frustrating process.
Related to this, a will has no effect on reducing estate taxes. An individual would need to reduce his or her tax liability through other means. Also, one should avoid putting conditional or contingent stipulations in a will when it comes to providing gifts. For instance, telling a granddaughter that she can have X amount of money only if she finishes college will usually not hold up under dispute.
Furthermore, a will is not the best place to leave funeral instructions. Instead, a person would need to create a separate document detailing his or her wishes with respect to his or her physical remains. Last, for those who want to provide for a relative with special needs, a will would not be the appropriate document for those instructions. It is also important to note that one cannot leave property to a pet or animal in their will; however, they can leave instructions for care and allocate funds through other channels.
Despite its shortcomings, a will does have its benefits and can be an important part of a person's estate plan. For more details on wills and how they can best be used, contact an experienced estate planning attorney.