Establishing a will is certainly not a favorite undertaking for anyone, but it’s important. In fact, it’s one of the most important things to take care of that people commonly forget about, avoid, or procrastinate.

Establishing a will is certainly not a favorite undertaking for anyone, but it’s important. In fact, it’s one of the most important things to take care of that people commonly forget about, avoid, or procrastinate. Don’t put it off – it’s imperative that you put in a bit of time and thought now in order to ensure you protect your legacy and your loved ones when you are gone. 

For example, after the saddening loss of vocal legend Aretha Franklin, it was learned that her $80 million estate had no will to guide the distribution of her assets, which leaves her family and loved ones now working through an ongoing legal process to determine how, where, and to whom her legacy will be distributed.

What is a will?

A will is the foundation of any estate plan – if you do nothing else in terms of estate planning, do this. It allows you to establish how you would like your property to be disbursed to your heirs after your death. In your will, you can also appoint an individual to assume the responsibilities of managing and settling your estate (executor). What happens if you do not have a will when you pass away? Your assets will be distributed according to your state law, which may not be aligned with your wishes.

Remember, a will is a legal document and the courts are typically disinclined to alter any of its terms. Therefore, it is imperative that your will be well thought out, detailed properly, and always kept up-to-date.

However, it’s also important to remember that a will is not the only means under which a decedent’s property changes ownership. Beneficiary designations on retirement accounts, annuities, and life insurance policies normally supersede provisions in a will, so these should periodically be reviewed and updated as needed. Also, assets which are owned jointly with a right of survivorship will pass to the surviving joint owner, even if the will says otherwise. That’s also true for accounts where the account owner has named a “transfer on death” or TOD beneficiary. Finally, any assets owned by a trust will be governed by the terms of the trust rather than the will, even if both were created by the same person.

There are also a number of other important pieces of estate planning to consider depending upon your individual needs and preferences.

  • Durable power of attorney: A durable power of attorney (DPOA) can be appointed in order to help protect your assets should you become physically or mentally incapable of doing so. By authorizing a trusted individual as your DPOA, they are permitted to do things such as pay bills, oversee your investments, collect benefits, and file taxes. However, a DPOA ceases to have any validity after your death, so the person that you appoint may be unable to do anything with your assets until they are appointed executor (assuming that you have the same person performing both jobs).
  • Health care power of attorney/advance declaration of health care/living will:Every state allows you to designate someone who can make medical decisions for you if you can’t communicate with the doctors. And, you can make your wishes known regarding the kind of care you might want withheld if you were in a terminal condition (such as a feeding tube, continuation of certain medications, etc.). Although this is an especially difficult topic to consider when you are well, it can be even tougher for your loved ones to sort out when you’re no longer able to communicate with them.
  • Trusts: A trust can provide an elegant solution to problems that can arise where one or more heirs is unable to manage their own money or might lose governmental benefits because they receive an inheritance. Trusts offer a level of asset protection that can be tailored to fit particular circumstances. Trusts can also offer tax advantages to both their creators and beneficiaries. However, the rules and laws concerning trusts are very complicated and can be confusing, therefore working with the right professionals for their advice and guidance is critical to achieving the best outcomes when the planning gets sophisticated. 
  • Insurance planning: Insurance is an essential part of an estate planning strategy. You can use life insurance to replace lost income, pay inheritance taxes, fund a succession plan, pay off debts, or replace the amount given to a charitable remainder trust. 
  • Charitable giving strategies: Some investors may want to incorporate charitable giving into their estate plan, to create their legacy through philanthropic efforts. We can help realize your intentions, provide you options for funding these goals, and work closely with you and your family, your attorneys, and other advisors to ensure your objectives are being met in a tax-efficient manner, in your best interest, and with minimal effort on your part. 
  • Business succession planning: If you are a business owner, it’s important to have a business succession plan outlined and in place in order to ensure your business lives on past your lifetime, and in the ways that you intend for it to. A few things to consider are the heirs whom you will pass the business on to and the knowledge they have of the business, as well as determining whether your business will have sufficient capital to last through the transition. We can help you assess and address these and other concerns to help protect your business through generations. 

Janney Montgomery Scott LLC, its affiliates, and its employees are not in the business of providing tax, regulatory, accounting, or legal advice. These materials and any taxrelated statements are not intended or written to be used, and cannot be used or relied upon, by any taxpayer for the purpose of avoiding tax penalties. Any such taxpayer should seek advice based on the taxpayer’s particular circumstances from an independent tax advisor.

About the author

Michael Repak

Vice President & Senior Estate Planner

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