Having a will as part of your estate plan is the responsible thing to do. With a will, you have ensured your wishes are followed regarding your assets, guardianship of your children and more.
It’s worth noting, though, that a will isn’t an estate plan. In fact, it’s just a single part of a bigger, more comprehensive plan to ensure your last wishes are carried out. Understanding more about the limitations of a will can help you see why creating an entire estate plan is a smart move.
Trusts
Your will has no impact on assets in a trust. This means that even if you stipulate the distribution of assets to someone in your will if they are in a trust, the assets will be distributed based on the terms of the trust. You can avoid this by stipulating that the distribution of the trust is outlined in your will when you create it.
Life insurance
When you purchase life insurance, you name a beneficiary who receives death benefits. This doesn’t change just because you have named a different beneficiary in your will. The benefits will go to the person named in your life insurance policy.
Co-owned property
If you own property jointly with someone (such as your spouse or a partner), you can’t distribute it via your will. Instead, if you pass away, your property ownership no longer exists. The joint owner will be the full owner.
Understanding the limitations of your will
While having a will is an important part of an estate plan, it’s just one part. It’s a good idea to have an entire estate plan created so you can ensure that your property and assets are distributed based on your wishes after you pass away.
