Understanding the Limitations of a Will

Guidance on What a Will Cannot Achieve

At Goldberg & Goldberg, we recognize the importance of a well-crafted will as part of a comprehensive estate plan. However, it’s crucial to understand that wills have certain limitations. Below we outline the essential matters that a will cannot cover and suggest alternative legal instruments to address your complete estate planning needs.

Non-Transferable Assets via a Will

A will does not govern the transfer of certain types of property, including:

  • Jointly held property with a right of survivorship.
  • Assets within a living trust.
  • Life insurance payouts when a beneficiary is already designated.
  • Retirement accounts such as pensions, IRAs, and 401(k) plans with named beneficiaries.
  • Securities and, in certain jurisdictions, real estate or vehicles with transfer-on-death (TOD) deeds.
  • Bank accounts with a payable-on-death designation.

Instructions for Your Funeral

Since wills are not usually read immediately following one’s passing, they are not the best place for funeral and burial instructions. It is more effective to document your wishes in a separate file and let your executor know its location for timely access.

Reducing Estate Tax Burdens

If your estate could face federal estate taxes, proactive steps should be taken to minimize these liabilities. A will in isolation does not offer tax avoidance strategies. Trusts, on the other hand, can sometimes lessen or defer tax obligations.

Circumventing Probate

Assets transferred through a will typically undergo probate, which may delay the distribution of the estate. If prompt asset distribution is a priority, consider trust creation or other probate-avoidance techniques.

Conditions on Bequests

Wills are subject to legal limitations on conditional gifting, such as stipulations based on marriage, divorce, or religious conversion. Some conditions are permissible, albeit they may lead to complex enforcement challenges.

Funds for Unlawful Ends

It is unlawful to allocate funds for illegal activities in your will, a rare but clear restriction on your testamentary freedom.

Support for Special Needs Beneficiaries

Providing for a beneficiary with special needs through a will alone is unsuitable. Instead, establishing a Special Needs Trust can furnish them with necessary support while maintaining eligibility for government aid programs.

Care for Your Pets

Directly bequeathing property to pets is not possible; however, you may appoint a caretaker and allocate funds to support your pet’s future well-being.

For a personalized approach to estate planning, including understanding the limitations of wills, contact Goldberg & Goldberg. We provide a free consultation to discuss your estate planning objectives. Reach out to us at (301) 654-5757 to secure your future and that of your loved ones.

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