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Why a Will Is Not Enough: Estate Planning and Your Legacy

Data analytics, scenario planning, and the finance department

 

Why a Will Is Not Enough: Estate Planning and Your Legacy 39

By Sabine Franco, Managing Attorney and Owner of The Ambitious Legacy Firm

Introduction

Having a will is a good thing, but it also has its limitations. A will is not enough to ensure that your assets will be distributed in a controlled manner, nor will it keep your family out of the lengthy court process that is probate. And because of the probate process, a will won’t provide immediate support for family members who need it.

To guarantee that your assets will be distributed to your loved ones according to your wishes, you need to have an estate plan in place. A will is an important part of that plan, but there are other tools available to make sure your wishes are carried out and that your estate isn’t depleted.

Estate planning involves preparing to manage an individual’s assets in the event of their incapacitation or passing. Anyone can put an estate plan into effect that will secure their assets for the future. From the time you start your career to when you’re about to retire is generally an ideal window for estate planning.

While many are beginning to understand just how important it is to have a will, they often don’t go far enough in initiating a complete estate plan. People tend to see wills as “one and done” ways to plan for the future and then overlook tools like trusts, insurance, and other vehicles that can protect assets and provide financial security.

Wills Vs. Trusts – What to Know About Each Vehicle and When You Need Them

Wills

A will is a legal document used to communicate who you want to receive the benefit of your assets once you have passed away. It also designates who you want to oversee distributing those assets.

Wills are an important part of an estate plan and have certain advantages, such as giving definitive directions for the distribution of assets as well as instructions for who will care for dependents. And if appropriately drafted, a well-crafted will can reduce the length of the probate process.

Wills also have some significant limitations. They don’t stop you from going through probate. A will isn’t enough to keep your family out of court because a will is required to be probated. 

One misconception people have about a will is that you don’t have to spend much time or money on the probate process. Probate often takes a minimum of 6 months. It’s also a costly process that can reduce the size of your estate. Probate is also public, which means your assets become a public record. Moreover, it is essential to keep trusted parties properly informed of where your will is and what’s in it. 

Trusts

Unlike a will, which is a document between yourself and the court, a trust behaves more like a contract between you and the trustee you designate to execute it. The main benefit of a trust is that the assets placed in a trust avoid the probate process.

Trusts are an essential part of estate planning in that they can protect high-value assets from probate as well as estate taxes. They also offer the flexibility to give the trustee specific instructions about how to distribute those assets, especially when leaving assets to minor children.

Many families are unaware of trusts being an option because they’re uninformed of the total value of their assets and feel that a trust isn’t an option for them. Also, the attorney they use to draw up their will may be unfamiliar with setting up trusts.

With 60% of Americans not having a will in place and 55% of Americans passing away without an estate plan, it’s important to make sure you have the proper legal and estate documentation in place to avoid having the state determine what happens to your assets.

Securing Your Legacy – The Proactive Steps Families Need to Take

The Ambitious Legacy Firm offers a 4-step road map that we recommend when advising clients on how to build an estate plan.

Step one is to evaluate your assets. Go through each asset you have, one by one, and itemize it with its condition and dollar value. Many people are often surprised at their total net worth simply because they have never looked at it in its entirety before.

Step two is to examine strategies for wills, trusts, insurance, long-term care, and retirement. This is a highly customized strategy for each individual. As each person’s needs are different, there is no “one size fits all” approach.

Step three is recommended for everyone, regardless of age or income level. Having a healthcare proxy and power of attorney is critical so that a trusted party can make necessary medical and financial decisions should you be incapacitated.

Step four is to look at any potential tax issues that can be mitigated or avoided so that as much of your estate can be protected as possible.

Why Estate Planning Will Benefit Legacies

If there is one overarching advantage to having an estate plan, it’s that it provides peace of mind. It is important to plan for retirement to protect your assets and provide for your loved ones even after you are gone. 

But to achieve this peace of mind comes with having some difficult conversations. Discuss your wishes with your family. Then specify those wishes in vehicles like wills, trusts, powers of attorney, and healthcare directives. This removes the ambiguity from estate planning and ensures your desires are known and carried out in the future.

Ultimately, properly evaluating your assets and protecting them using estate planning can build, protect, and provide something everyone hopes to achieve – a lasting legacy and generational wealth.

About Sabine Franco:

Sabine Franco, Managing Attorney and Owner of The Ambitious Legacy Firm P.C., leads her team, ensuring that they help clients create businesses, protect properties, and plan legacies so they can be safe as they pursue their life purpose. With over a decade of experience, Sabine advises clients in asset protection and estate planning, so they are preparing and designing the best possible outcomes for their future endeavors. She provides her clients with trust and estate tools to achieve success with security. Sabine has worked in various fields such as business, matrimonial law, real estate, and estate planning. At The Ambitious Legacy Firm, she applies each field she has worked in to kickstart the next generation to help families plan for their futures through legacy and estate planning. Recognized as a “Super Lawyers” rising star for 2022, Sabine has been featured several times on “The Breakfast Club” (New York’s #1 radio show) and the “Earn Your Leisure” podcast, which is among the top five podcasts. She graduated from Hofstra University School of Law. When Sabine is not working with her clients, she provides legal guidance on her Podcast and YouTube show, “The Ambitious Legacy Podcast.” Recently, Sabine has published her first book titled, “You’re Richer Than You Think: A Step by Step Guide to building a lasting financial legacy for your family.” She also manages the legal affairs of a nonprofit organization, “Marie’s Food Pantry,” whose mission is to fight hunger in the poorest neighborhoods of Haiti by providing daily hot meals to the community. Sabine is a wife and mother and resides in Nassau County, NY. To learn more, please visit www.theambitiouslegacyfirm.com.

 

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