A lot of people think that estate planning consists solely of making a will. While creating a will is important, this should not be the extent of your estate plan. Many of your assets do not hinge on your will, and there are other aspects of your life for which you need different documents.
Your estate plan should be more robust to cover more of your assets and concerns. Here are some reasons you should have more than just a will.
1. Beneficiary designations do not go through probate
A substantial share of your wealth may be in a life insurance policy or retirement account, such as a 401(k) plan, IRA, pension or annuity. These assets will pass outside of the probate process. Regardless of what is in your will, the designations on these accounts will take precedence. You should diligently update these designations after you or your heirs experience any significant changes, such as a marriage, divorce, death or birth of a child.
2. Your heirs need their inheritance quickly
If you want your loved ones to get your assets quickly, a will is probably not the most efficient way to accomplish this. Probate can take a long time. If your family waits months or years to receive your property or money, they may suffer financially. You can speed up this process by transferring your estate through a living trust.
3. You have specific medical wishes
Your estate plan can cover your end-of-life treatment. If you have preferences over life support or resuscitation, you should create an advance health care directive. This document will spell out your desires regarding health care so you can pass away with dignity. You can also appoint a health care power of attorney to advocate for your wishes if you become incapacitated.
These are just a few of the examples of when a will is not sufficient. You should pursue a more comprehensive estate plan to protect your assets and wishes.