Estate Planning Myths and Misconceptions by Brittney R. Mulvaney

Myth #1: I have a will so probate won’t be necessary.

This is a very common misconception. Probate is the court supervised process for distributing a person’s property and paying final bills after that person passes away. A last will and testament is not a document that can be executed to avoid probate. Wills can more appropriately be thought of as the instructions for probate. Your will names an executor to carry out your wishes upon your passing. The executor you have named is not able to start doing their job until the court appoints them through the probate process. Depending on your particular family dynamics, there may be alternative ways to avoid probate (if that is a concern) that do not depend on having a will.

Myth #2: I don’t need a will. All of my accounts have beneficiaries listed.

One potential method of avoiding probate for certain assets is to make sure all of your financial accounts have a beneficiary listed on a beneficiary designation form linked to the account. These forms are provided by the bank or other financial institution where the account is held. For certain clients, this can be an appropriate way to pass on financial accounts to heirs. However, this method is not appropriate for clients with minor children or other beneficiaries that the client does not want to receive an inheritance outright.

A minor should not be named to directly receive an account via a beneficiary form because the minor needs an adult named to manage the minor’s share until the minor reaches at least age eighteen (most clients push this age to twenty-five or thirty). A last will and testament or revocable living trust can accomplish this purpose by naming a trustee to manage the share for the minor until the minor reaches a suitable age to receive the inheritance. Prior to the age of the client’s choosing, the trustee the client has named typically has authority to make distributions to the minor for the minor’s health, education, maintenance, and support.

A beneficiary with special needs should also not receive an inheritance directly. Receiving an inheritance directly could disqualify the beneficiary from continuing to receive disability benefits. Setting up a last will and testament or revocable living trust with an appropriate mechanism to account for the beneficiary’s disability is necessary so they do not lose any disability benefits they would otherwise be entitled to receive.

At Lodestone Legal Group we are here to help with all of your estate planning needs.  If you are interested in setting up a free initial consultation to further discuss your particular situation or if you have any questions, please give us a call at 615-807-1240 or contact our estate planning attorney directly at bmulvaney@llgtn.com.  We look forward to working with you!

Post Authored by Brittney R. Mulvaney