As families get together over the holidays, people often take the opportunity to make sure their older family members, like parents and grandparents, have a will in place. If you’re the recipient of such inquiries, you might understandably look for the seemingly easiest, least expensive way to create a will – if only to satisfy your loved ones.
You’ve likely seen TV ads for do-it-yourself (DIY) wills and other estate plan documents. They can make them look easy to create and legally sound. If you have a relatively uncomplicated “estate” – largely comprised of your home and some retirement and bank accounts – you might be giving a DIY will serious consideration.
Having a DIY will is generally better than not having one at all. However, it’s important to understand the limitations of going this route.
An estate plan should include more than a will
While a will is the cornerstone of an estate plan, it shouldn’t be the only document in it. All adults should have documents giving power of attorney (POA) to someone to oversee their medical care and finances should they be unable to do so. This can happen with a serious injury or illness. It’s also smart to have an advance directive for health care (often called a living will) where you state your wishes for things like when life-prolonging measures should be continued or ended. This can save loved ones from wondering or arguing about what you would have wanted.
It’s often beneficial to set up a revocable living trust to keep your assets out of probate. This will help them transfer to your designated beneficiaries more quickly and privately.
The importance of personalized estate planning
Numerous other estate planning documents can benefit your loved ones, depending on your family’s unique makeup. This could include an incentive trust for an adult child who’s not yet ready to handle an inheritance, the assignment of a pet guardian who will take your companion animal(s) if you can no longer care for them or when you pass away and numerous other tools.
Most people don’t need or want a large, complex estate plan. However, determining which estate planning tools can help protect your hard-earned assets and your family long after you’re gone is a highly individualized task. Getting personalized estate planning guidance can be well worth the time and investment.