Are there other estate-planning tools besides wills and trusts?

The written word is powerful, which is why a will can clarify an individual’s intentions regarding how his or her assets should be distributed to heirs and other loved ones. However, there are limitations to a will that should be noted.

First, a will cannot trump the contractual language found in non-probate assets like life insurance or retirement account policies. Those assets transfer to the named beneficiaries even if language in a will has instructions to the contrary.

A law firm that focuses on estate planning can help individuals avoid these common mistakes and misconceptions. In addition, our attorneys can provide a comprehensive range of estate-planning services that will address a full range of contingencies. For example, we can help individuals develop a plan that will provide for them in the event of their incapacity. With a living will and medical power of attorney, medical decision-making can be entrusted in the hands of someone who will dutifully represent the individual’s wishes.

Trusts might be a wise option for individuals who are concerned that beneficiaries will spend their inheritance too quickly. In fact, one 2012 study found that the average baby boomer depletes around half of his or her inheritance in the first year. To avoid that outcome, restrictions can be included in the trust's documentation.

Finally, although wills and trusts feature prominently in many estate plans, we can also help individuals explore strategies for utilizing non-probate assets. In addition to contractual policies, a payable-on-death designation in a bank account or a deed with a transfer-on-death designation may be able to pass to beneficiaries without going through probate. Check out our firm’s website to learn more about these and other estate-planning strategies.

Source: Consumer Reports, “6 costly estate-planning minefields, and how to avoid them,” April 14, 2015