Now that we have a pretty good idea of what an estate plan should do for us, let’s look at some options and see how they stack up.
The first option to look at is the most popular candidate – the Last Will and Testament.
Come on now, everybody knows that you have to have a will right? If you die without a will the “state” takes all your property.
How many times have we heard these colloquialisms and just come to accept that a will is the way to go.
But is it?
Let’s see how a will does on the factors we decided make up a good estate plan.
- Does a will get your property where you want it when you want it when you die?
For the most part – yes. But there are some important exceptions. First, many states have statutes that protect spouses and children in the event of death. In these states, a child or spouse not provided for in your will can demand a share of the estate in spite of what the will provides. So if you are in one of these states and decide to leave everything to Aunt Mitzie, a will won’t do that.
- Does a will convey your property with certainty? For the same reasons set forth above, the answer is no. Not only can a bequest in a will be thwarted by specific statutes, but a will can be contested at various stages of the probate process. Disappointed “heirs”, frustrated relatives, an executor that does not want to be executor…. All these things can derail the probate of a will.
- Does a will provide a fast, easy probate process? Absolutely not! The probating of a will fails this test in every respect! It is not fast. It is not easy. It is not uncomplicated!
Probating a will requires commencing a case in probate (or equivalent) court. The will is entered as public record, and an application for appointment of a personal representative (aka executor) is filed. Notices of the opening of the estate and the application for appointment must be published. Anyone can object to the appointment of the personal representative, anyone else may submit an application, the will itself can be contested by anyone, including relatives who do not believe they received their “fair” share. Then you wait. You wait for hearings to be scheduled. You wait for whatever period of time your state allows for claims against the estate to be filed. You wait for hearings on those claims if they are objected to. You must file an inventory of all the property owned by the person at their death. Finally, after months or even years, the estate can be closed the property identified in the will conveyed to the proper beneficiaries. To call this entire process quick, simple or easy is ludicrous.
- Is your estate handled privately? I think the last response effectively blows that idea out of the water. Everything about the estate – who died, when, what they owned at the time of death, who they owed, who they are leaving things to…. ALL public record. No more needs to be said on this
- Is the process simple? I think we’ve addressed that there is nothing simple about probating a will, even if it is not contested. If there are disputes the process can go on for years.
So how does our will stack up as an estate planning tool? I would say, pretty poorly. A maybe on question 1 and definite “no’s” on every other issue.
So much for conventional wisdom!!