Will-Based Estate Planning in a Nutshell

Although a Trust-based estate plan is more comprehensive, a Will-based estate plan can be an excellent alternative approach for young individuals and couples that are just getting started; and it's definitely better than having no plan in place at all.

Key Takeaways

• A Will-based estate plan can be a simpler, alternative approach to a Trust-based plan

• Ancillary documents are integral to a comprehensive plan. Without them, there is no way to ensure your ducks are in a row in the event of incapacity

• Will-based plans are generally less expensive than Trust-based estate plans

WHAT IS A WILL-BASED PLAN?

Although a Trust-based estate plan is more comprehensive, a Will-based estate plan can be an alternative approach and is definitely better than having no plan in place.

A Will-based plan is an estate plan that does not create a living trust to hold title to your assets. Instead, your plan is based around your Will, which is a legal document that directs the disposition of your assets after your death.  Your Will also allows you to appoint guardians for minor children.  Unlike other estate planning documents, a Will does not go into effect until an individual's death. 

Even though creating a Will outlines your last wishes, under a Will-based plan, your estate will still need to go through the probate process.  The process should be easier because you will have appointed an executor and determined how your assets are to be distributed, so as to guide the executor and Probate Court; but it will still take time to go through the court process.

WHAT DOES A WILL-BASED PLAN CONTAIN?

At Schlau|Rogers, we pride ourselves on creating high quality and comprehensive estate plans that ensure your wishes are properly executed.  Our Will-based estate plans consist of:

• Last Will and Testament

• Durable Power of Attorney (Financial)

• Living Will

• Advance Healthcare Directive

• HIPAA release authorization

With this suite of documents, you will be providing the necessary instructions to a person left in charge once your assets are ready to be distributed. Hospitals, the Probate Court and financial institutions will also be well-informed to allow for a smoother transition. Keep in mind though, Probate can still take some time, and will not be avoided. One way things can move a little quicker is if the value of your assets is less than $166,250.

At Schlau|Rogers, both our Trust-based and Will-based plans include the same comprehensive and individually-tailored ancillary documents. As a result, you can be sure, whether you decide to go "all out" and create a Trust-based plan or you opt for the simpler Will-based alternative, your plan will always be the product of the most advanced planning tools available.

WHY DO I NEED ANCILLARY DOCUMENTS IN ADDITION TO MY WILL?

So now that we know a Will does not take effect until death, we can correctly infer that while you are alive, a Will has no authority in the event of incapacity.  So, we should be asking, "What do we need for lifetime planning?" Enter the ancillary documents.

The first ancillary is a durable power of attorney, which allows you to appoint someone you trust to manage your financial affairs should you become incapacitated. The second is an advance healthcare directive, which allows you to appoint someone to make healthcare decisions for you if you cannot make them for yourself.  

Another ancillary is a Living Will, which allows you to make end-of-life decisions so that your family is aware of your wishes and does not need to make tough decisions in trying times. Finally, a HIPAA release creates a list of individuals you want to have access to your confidential medical information in the event of an emergency.  All these documents combine to create a comprehensive plan that takes care of the distribution of your estate at your death and ensures that you are taken care of in the event of incapacity.

As you can see, these ancillary documents are integral to a comprehensive plan. Without them, there is no way to ensure your ducks are in a row in the event of incapacity. Side note: if you read our previous blog about Incapacity planning, you might see that the same documents in a Trust-based plan are used in a Will-based plan to account for incapacity. Again, at Schlau|Rogers, both our Trust-based and Will-based plans include the same comprehensive and individually-tailored ancillary documents to ensure maximum effectiveness.

THE BENEFITS OF A WILL-BASED PLAN

The benefits of a Will-based estate plan include the following:

• They are simpler, and easier to understand

• Will-based plans are generally less expensive than Trust-based estate planS

• Some smaller estates may qualify for a probate exemption which allows you to avoid the probate process

• If there is anticipated litigation by other family members, a judge-overseen process may be in the best interest of all parties

To see a side-by-side comparison of Will-based estate plans and Trust-based estate plans, check out our upcoming blog on that very topic. Here's to your smarter estate plan.

Joshua Rogers is a co-founding principal of Schlau|Rogers and an estate and business planning lawyer practicing in Orange, San Diego, Los Angeles and Riverside counties. He is an avid Lakers fan, blogger, aspiring scuba diver, and takes pride in helping others reach their goals.

At Schlau|Rogers, we do more than just estate and business planning, probate and trust administration. Our objective is to provide individually-tailored plans that allow you the opportunity to reach your goals, all while minimizing headaches and risk, and maximizing peace of mind.

On our blog, you'll find useful information about estate and business planning, probate and trust administration, as well as some tidbits on personal finance, taxes, and anything else we think will help minimize headaches, worry and risk, all while maximizing peace of mind.

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