Five Reasons to Have a Will
1. The most obvious advantage of a properly drafted will is the ability to direct assets to the intended beneficiaries by the decedent. Not only can beneficiaries receive assets in varying percentages according to need, the decedent can control the timing of distributions. The wishes of the decedent can be detailed and expanded by establishing a testamentary trust (appointed through a will). This type of trust can be thought of as an instruction document drafted to take control and direct assets as per the decedent's directions.
2. Another advantage afforded to the decedent is the ability to select fiduciaries who will ultimately perform the necessary estate settlement duties. One such fiduciary, is a custodian selected for the care of surviving children. After all, the chosen caretaker of the decedent's children is best left to the discretion of the decedent. A pitfall of dying without a will (intestate), puts the election of this custodian in the hands of the state courts. All fiduciary selections are made through a properly drafted will. Another such fiduciary is the estate executor who is responsible for executing the instructions of the will. By selecting an executor in advance, the decedent may choose to exclude bonding of said executor. This will reduce settlement costs because intestacy succession requires bonding of a state appointed administrator.
3. Through the operation of a will, specific bequests can be made as per the wishes of the decedent. This is an important power when trying to eliminate arguments between heirs. Additionally, the decedent can designate estate assets for their best use. For example, an avid skier may enjoy the winter Challet and a daughter may enjoy the family tiara.
4. Tax efficiency is another consideration when designating beneficiaries. The marital deduction is maximized by passing assets to a surviving spouse, and minimized, by assigning distributions to children and bypassing the estate of the surviving spouse. Funding various trusts upon death, by direction of the will, can carry out several specific estate planning strategies. One example, is to control the final distribution of trust assets upon the death of a surviving spouse. The decedent may want to give support to his wife during her life, but may want to earmark the remaining assets for his children upon her death. This is one example of what can be accomplished with testamentary trusts executed through operation of a will.
5. A decedent can include language within his will that can direct healthcare decisions to a trusted person upon a triggering event (mental incapacity). A healthcare directive specifies the decedent’s choices, such as whether to allow life support or to perform resuscitation.