A will is the best-known estate planning document. If you are creating an estate plan for the first time, you may wonder if you need any more than this. The answer is that it depends. While there are advantages to the simplicity of a will, there are also disadvantages.
A simple will cannot cover all eventualities
- Look after you while you are alive: Estate planning is about more than what happens to your property when you die. A health care directive can ensure you receive the end-of-life treatment you desire. There are ways to fund any future health care costs without draining your estate.
- Allow someone to act on your behalf: Consider what would happen if you suffered an accident or illness that prevented you from signing documents. Creating a power of attorney enables everyday life to carry on all when you cannot participate.
- Protect your estate from creditors: When you die with outstanding debt, your creditors can claim against your estate. To avoid this, you can move money out of your estate by gifting or the use of trusts.
- Ensure people use wisely the assets that you leave: Leaving someone a lump sum of money could see it soon disappear. Perhaps they spend it all at once, lose it in a divorce or see creditors seize it. Consider using trusts to place conditions on how money is spent and protect it from others.
A well-made estate plan benefits and protects you and your family while you are alive and after you die. Only by understanding the full range of options available can you make a valid judgment as to whether a simple will is sufficient for you.