A will may be the first thing that people think about when it comes to their estate planning. However, wills have some disadvantages. A will is a public court document that is used in a probate proceeding when a person died with their assets in their name. The probate process determines whether the will is valid and may be expensive and lengthy. Family members may also seek a larger share of the estate by engaging in a will contest, challenging its validity or allocation of assets.
A will does not provide disability protection. It takes effect and states the beneficiaries only when a person dies. Relying on a will without separate disability planning may result in a guardianship proceeding in which a judge appoints a legal guardian. This can be costly, lengthy and intrude into a person’s privacy.
Wills are also not designed to protect assets from nursing home costs. A person may need to spend down their assets and pay for care later in life instead of preserving assets for inheritance.
Wills do not assure that assets remain in a person’s bloodline, because it does not cover anything beyond a person’s death and the assets being left to their children. Surviving children may then leave their inheritance to a surviving spouse who later remarries.
Other estate documents and plans avoid these disadvantages. A living trust is a private entity that controls its assets. Trust do not need to go through probate. A person may add beneficiaries or assets jointly or without survivorship rights for assets that are not in a trust.
Disability planning also avoids guardianship proceedings. This allows the appointment of individuals who will manage a person’s affairs if they become incapacitated. Living trusts also permit the naming of trustees who can manage trust affairs when its creator lacks this capacity.
Long-term care may also be covered by long-term care insurance or a Medicaid Asset Protection Trust that safeguards assets in the trust from nursing home costs after these have been in the trust for five years. This further safeguards a person’s assets.