What is a Will-Based Estate Plan? 

 

For General Informational Purposes Only.  The information in this FAQ is intended to provide general guidance regarding will-based estate planning. It is not legal or tax advice. The specific provisions of your estate planning documents govern how your plan operates.

 

A Will-based estate plan provides direction for how your assets are distributed at death, how decisions are made if you become incapacitated, and how your wishes are carried out. Below is an overview of the key documents typically included in a will-based plan and important planning considerations.

Essential Documents in a Will-Based Estate Plan

 

1. Last Will and Testament (Will)

• Purpose: Directs how assets are distributed at death, appoints a personal representative (executor) to administer the estate, and names guardians for minor children (if applicable).

• Importance: A will ensures that your assets are distributed according to your wishes and provides your executor with  legal authority to administer your estate.

• Trust for Beneficiaries: You may create a Trust for your beneficiaries in your Will.

 

2. Financial Power of Attorney (POA)

• Purpose: Appoints someone you trust completely to manage financial matters if you are unable to do so.

• Importance: Avoids a court-appointed conservatorship, ensuring continuity in financial management.

 

3. Advance Directive for Health Care (HCD)

• Purpose: Appoints a health care agent to make medical decisions if you (the principal) cannot communicate your wishes.

•  Importance: Ensures medical decisions align with your preferences, preventing family disputes and court intervention.

• Includes the following: HIPAA Authorizations (grants access to medical records and information) and Living Will (provides preferences for life-sustaining treatments and end-of-life care). 

 

The Importance of Asset Titling

How assets are titled  determines how property passes at death, and may override the terms of a Will. Proper asset titling helps avoid probate delays and unnecessary legal fees.

Common forms of asset ownership include:

• Joint Tenancy with Right of Survivorship: Automatically transfers assets to surviving co-owner(s) without probate.

• Tenants in Common: Allows individual ownership shares to pass according to your Will.

• Transfer-on-Death (TOD) or Payable-on-Death (POD) Designations: Allows certain assets (such as bank accounts, investment accounts) to transfer directly to named beneficiaries without probate.

 

The Importance of Beneficiary Designations

Beneficiary designations on retirement accounts, life insurance policies, and annuities generally override instructions in a Will. Keeping these designations current helps ensure that assets are transferred according to current wishes, helps avoid unintended results, and provides clarity to beneficiaries.

• Primary Beneficiaries: First in line to receive assets.

• Contingent Beneficiaries: Receive assets if primary beneficiaries predecease the account owner.

 

The Significance of Proper Planning

Properly executed documents, strategic asset titling, and carefully maintained beneficiary designations collectively:

• Minimize probate complexities

• Protect privacy and streamline administration

• Ensure timely and intended distributions

• Provide clear guidance to family members and fiduciaries, reducing stress during difficult times

 

Summary

A comprehensive Will-Based Estate Plan protects your wishes, ensures smooth transitions of assets, and provides essential safeguards during incapacity or illness.