Your Massachusetts Estate Plan: 5 Reasons a Will is Not Enough
Enhancing Your Estate Plan Beyond a Simple WillEven though it’s not a topic you like to think about on a day-to-day basis, you know you need to prepare for your family’s life after your death.
A will is one of the most common estate planning documents but surprisingly, this legal document often doesn’t suffice and won’t guarantee your wishes are carried out. If you’re relying on a will as your sole estate planning document, you could be leaving your family unprotected. While writing a will is a great start, it isn’t comprehensive enough to account for all of the complexities of your finances and your life. Below we explore the top five reasons you likely need more than a simple will when it comes to planning your estate. |
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1. A Will Must Be Validated by Probate and May Not Fully Reflect Your Wishes
Many people believe that if they have just a will they can avoid probate court- this is not true. By law, a will must be presented to and validated by the Probate Court before it can take effect.
Probate is a public process that leaves your will and wishes open to contest or challenge by parties who think they should be included. Probate could prevent your family from gaining possession of your assets for up to a full year following your death, when they may have immediate needs for cash to take care of themselves, pay the bills, pay any estate tax you may owe, and much more.
The probate process is estimated to eat up between 3% and 8% of the value of your estate, which could be a significant sum. You may not be able to avoid the probate process entirely, but a careful and comprehensive estate plan that includes transferring substantial assets through trusts instead of through a will can help ensure as many assets as possible pass outside of probate, and that to the extent you need to go through the probate court the process is streamlined and simplified.
Probate is a public process that leaves your will and wishes open to contest or challenge by parties who think they should be included. Probate could prevent your family from gaining possession of your assets for up to a full year following your death, when they may have immediate needs for cash to take care of themselves, pay the bills, pay any estate tax you may owe, and much more.
The probate process is estimated to eat up between 3% and 8% of the value of your estate, which could be a significant sum. You may not be able to avoid the probate process entirely, but a careful and comprehensive estate plan that includes transferring substantial assets through trusts instead of through a will can help ensure as many assets as possible pass outside of probate, and that to the extent you need to go through the probate court the process is streamlined and simplified.
2. The Inflexibility of a Will Versus the Adaptability of a Trust
Once a will is written and signed, it is set. It can only be revoked by destroying the original document, leaving you without a will, amending the will through a document called a codicil which still requires the same formalities as a will in order to be legally valid, or going through the entire will drafting process again and signing a new will.
At your death, a valid will, once probated, is set. There can be no changes. A will drafted 15 years ago does not have the flexibility to deal with the unexpected.
A will can also only dictate who receives property, not how it will be managed or disposed of. This can be important if you are leaving a family home or business interests to your heirs. The will distributes the interests in those assets as you direct, but once distributed your heirs are free to do as they choose with those interests, which may be contrary to your wishes.
Trusts, on the other hand, provide much greater flexibility. A revocable trust is one that you can alter, amend or revoke at any time during your lifetime. Even if you choose an irrevocable trust, either kind of trust will include an appointed trustee. It will also include whatever guidelines and directions you choose to give that trustee. In the example of a family property, the trustee could be directed to only sell the property with the consent of all or some defined number of the beneficiaries. In the example of your interest in a business, the trustee could be given direction about management of that business and how and when to allow heirs to be bought out of the business.
At your death, a valid will, once probated, is set. There can be no changes. A will drafted 15 years ago does not have the flexibility to deal with the unexpected.
A will can also only dictate who receives property, not how it will be managed or disposed of. This can be important if you are leaving a family home or business interests to your heirs. The will distributes the interests in those assets as you direct, but once distributed your heirs are free to do as they choose with those interests, which may be contrary to your wishes.
Trusts, on the other hand, provide much greater flexibility. A revocable trust is one that you can alter, amend or revoke at any time during your lifetime. Even if you choose an irrevocable trust, either kind of trust will include an appointed trustee. It will also include whatever guidelines and directions you choose to give that trustee. In the example of a family property, the trustee could be directed to only sell the property with the consent of all or some defined number of the beneficiaries. In the example of your interest in a business, the trustee could be given direction about management of that business and how and when to allow heirs to be bought out of the business.
3. A Will Alone Won't Shield Your Estate from Taxes
Alone, a will is unable to shield your assets from federal and state estate taxes, which can significantly reduce the total left to your descendants. This is most likely more relevant to you and your family than you might think: if you have a life insurance policy, equity in your home, and typical retirement savings, your taxable estate could easily exceed the $2 million exemption under Massachusetts estate tax laws, which could cost your family tens of thousands of dollars in taxes. There are additional documents and strategies, including trusts and family gifting plans, which can help you minimize or avoid altogether this additional tax burden on your family.
4. Limitations of Wills: Assets That Bypass Probate
A will only directs the distribution of assets in your probate estate. A surprising amount of your wealth, however, does not pass through probate. For example, if you own a home jointly with your spouse, that home will automatically transfer to your spouse without being part of the probate estate. Other assets, such as retirement plans, life insurance proceeds, and certain property held jointly, pass automatically to whoever is named as the beneficiary or who owns the property jointly with you. Your will cannot override deeds or beneficiary designations.
This means that a will directing all of your property to your children equally does not mean that all your property will go to your three children, because of all of the assets that are not even subject to the will in the first place. Whether you have a will or not, it is important to periodically check your beneficiary designations to make sure they have kept up with changes in your life and are consistent with what you want.
This means that a will directing all of your property to your children equally does not mean that all your property will go to your three children, because of all of the assets that are not even subject to the will in the first place. Whether you have a will or not, it is important to periodically check your beneficiary designations to make sure they have kept up with changes in your life and are consistent with what you want.
5. Beyond Wills: Enhancing Guardianship and Protecting Your Family
A will can name a conservator and guardian for your children, but the details of how you want your children raised, such as education and religion, are not topics people typically feel comfortable including in a public document.
A will is just a note with your basic wishes expressed. But a comprehensive legal document like a trust has the power to do more than state your expectations. You can delay monetary distributions until your children are old enough to handle such distributions. You can provide more direction for your chosen guardian in terms of education, religious upbringing, and more. You can also protect your children from misuse of trust funds.
Another thing a will cannot do is protect you and your family if you are incapacitated. A will only takes legal effect upon your death, so it cannot control who makes medical decisions for you, or financial or legal decisions, if you are alive but unable to do so yourself. This is why most comprehensive estate plans include two key documents: a health care proxy and a durable power of attorney. These two documents allow you to designate decision makers ahead of time.
A will is just a note with your basic wishes expressed. But a comprehensive legal document like a trust has the power to do more than state your expectations. You can delay monetary distributions until your children are old enough to handle such distributions. You can provide more direction for your chosen guardian in terms of education, religious upbringing, and more. You can also protect your children from misuse of trust funds.
Another thing a will cannot do is protect you and your family if you are incapacitated. A will only takes legal effect upon your death, so it cannot control who makes medical decisions for you, or financial or legal decisions, if you are alive but unable to do so yourself. This is why most comprehensive estate plans include two key documents: a health care proxy and a durable power of attorney. These two documents allow you to designate decision makers ahead of time.
How We Can Help
Estate planning may not be as straightforward as drafting a simple will, but an experienced estate planning lawyer can help you find peace of mind by creating the set of documents, including wills and trusts, that will address your specific situation and goals. Get the confidence that comes with knowing your loved ones are protected. You can use the button below to schedule a free information call, or give us a call at (781) 784-2322.
Meet Our Estate Planning Lawyers
Emily Smith-Lee is the owner and founder of slnlaw. She is a 1996 graduate of Boston College Law School. She was previously a partner at the Boston office of a large international firm, where she worked for thirteen years before starting the firm that became slnlaw in 2009. She has been recognized as Massachusetts Superlawyer each year since 2013, and in 2018 earned recognition as one of Massachusetts Lawyers Weekly's Lawyers of the Year.
Jenna Ordway: Jenna is a 2013 graduate of Quinnipiac Law School, and also earned an LLM in Taxation from Boston University in 2015. She has been affiliated with slnlaw since 2011, first as a law clerk and then as an attorney. Jenna has been recognized since 2019 as a "Rising Star" by Massachusetts Superlawyers. Jenna wrote a book on estate planning: The Road to Peace of Mind: What You Need to Know About Estate Planning. Jenna has helped many individuals and families with planning to protect their legacies and loved ones, and planning for the future and succession of their businesses.
Sharleen Tinnin: Sharleen is a 2010 graduate of Northeastern University School of Law, and earned her LLM in estate planning from Western New England Scool of Law in 2016. She has been with slnlaw since 2023. Prior to joining slnlaw, she worked with King, Tilden, McEttrick & Brink, P.C. on complex civil litigation matters. She previously worked for the United States Department of Justice, and received an "Excellence in Justice" award in 2017. Sharleen has helped many clients with planning for their legacies and their future, and navigating the probate process in Massachusetts after the death of a loved one.
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