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You probably already know that, in a will, you name whom you want to handle your final affairs and who you want to receive your assets after you die.
But did you know that your will only controls the assets that are titled in your name? Your will does not control assets that are titled in joint ownership and go to your spouse or another joint owner when you die. And, it doesn’t control assets with beneficiary designations, like your IRA, retirement benefits or life insurance policies.
So, to begin with, your will does not give you control over all of your assets.
What about the assets your will does control? After you die, these assets will have to go through a court-controlled process called “probate.”
Probate Process Has Control of Your Assets
The bottom line is that the probate process — not your family — has control over how your will is interpreted, how much probate will cost, how long it will take and what information is made public.
There’s another problem with a will.
Wills and Incapacity
A will is no help if you become incapacitated — because a will only goes into effect AFTER you die. Remember what happened to Groucho Marx?
If you can’t conduct business due to mental or physical incapacity (for example, from Alzheimer’s disease, stroke or heart attack) only a court appointee can sign for you — even if you have a will.
Having the court involved can be expensive and time consuming. It’s a public process. And it doesn’t replace probate when you die.
There is a document called a “durable power of attorney” that can allow someone to handle your financial affairs if you become incapacitated. However, some financial institutions won’t accept ANY power of attorney. Others will only accept one if it is on their own form. The reason is that they do not want the liability that could result from handing over your assets to someone else.
Minor Children or Grandchildren
If you have minor children or grandchildren and you have a simple will (which many people have), it may not give you the control you want.
That’s because the court (not the guardian you name in your will) will control the child’s inheritance until the child reaches legal age. At that time, the child will receive the full inheritance.
This is not what most parents and grandparents would want. Most would prefer that the court not have control over the child’s inheritance, and that the child inherit at a later age. But with a simple will, you have no choice.