Is a Will Obsolete? In my opinion, the Will is not completely obsolete, but it is close. Because of advances in estate planning law in the last 20 years, Wills, while important, aren’t as important as they once were.
A Will Requires Probate
That a Will requires Probate surprises many people. They think that by writing a Will, they are avoiding probate. However, that isn’t true.
A Will requires a Court to validate it and admit it for administration. Only then is the Will active.
No Lifetime Protection
A Will doesn’t provide any lifetime protection for you or your assets. A Will is only active after it has been validated by a Judge.
It takes a Durable Power of Attorney and a Healthcare Power of Attorney to provide lifetime protection for you.
A Will alone exposes your home to “Medicaid Recovery.” Even though Medicaid lets you own a home, when you pass, they can put a lien against it or make a claim as a creditor for all the money they’ve spent. As part of probate, that lien or claim must be paid even if it means selling the home.
Creditors can put their claims in during Probate. They will have to be paid as part of the Probate process. Even if it means selling assets, the claims must be paid.
What to do Instead
You need to use more than just a Will.
For your lifetime protection you need a General Durable Power of Attorney and a Healthcare Power of Attorney. These name the person (or people) you want to manage your financial, personal, legal, and medical affairs if you can’t.
For passing your property, you can use alternative methods to pass real estate and accounts outside of Probate…with or without a Trust.
You need to work with an estate planning attorney well versed in estate planning. They have methods to pass your real estate and other property outside of Probate without a Trust. Arkansas has types of deeds to pass real estate outside of probate and avoid Medicaid Recovery.
Here are a few reasons to use a Trust based plan:
- You have minor children
- You have children with special needs
- You have children with addictions to drugs, alcohol, gambling, …
- You have children with rocky marriages
- You worry about children divorcing
- Your children have trouble managing money or have credit issues
- You want to leave complex instructions or sell everything and split the money
- Your children won’t get along and you want to name a third party to oversee the division and distribution
Is a Will Obsolete? Not completely, but it is at the beginning of its end. The only reason you really need a Will is as a safety net in case something isn’t handled otherwise.
No Probate = No Creditors