Estate Planning

Introduction

Many people are dutiful in writing wills. But they often do so under the wrong assumptions and without an understanding of the chief benefits of writing a will. Namely, many people assume that writing a will is the only way to manage and distribute one’s possessions after death. But this is not the case. As mentioned in another blog topic, there are also trusts. However, if you do not create a trust or will, this does not mean that your possessions are simply left to no one. Instead, it means that you have died intestate and have lost the right to choose who you prefer to get your possessions. In intestacy, the state assumes control of your possessions and will distribute the possessions based on predetermined rules that often are contrary to what you would have elected to do prior to your death. Maintaining control, though, is not the only benefit to writing a will as I will address in this blog entry.

What is a Will?

A will is a legal instrument that permits a person to make decisions on how his possessions will be managed and distributed after his death.

What are the Disadvantages of Using a Will?

Wills are commonplace and many people think that they should assign and distribute their assets using a will. But there are disadvantages of using a will. Namely, a will is subject to costly probate proceedings, the contents of a will are public record, and a will is tax inefficient, i.e., you will lose out on tax dollars when you use a will to manage and distribute assets after death.