At Chesapeake Wills and Trusts, we strive to empower you with comprehensive knowledge for effective estate planning. Part of this involves understanding not just what a will can do, but also what it cannot. Being aware of the limitations of a will is essential to ensure your estate planning proceeds seamlessly and truly reflects your intentions.
Today, we delve into three crucial limitations of a will in Maryland. Recognizing these boundaries helps prevent potential misunderstandings, avoids unnecessary disputes, and ensures the smooth transition of your assets upon your passing. Our expert team is committed to guiding you through these complexities, ensuring your estate planning is robust, and providing solutions tailored to circumvent the limitations of a traditional will.
Limitation 1: A Will Doesn’t Protect Assets in Case of Nursing Home Admission
Estate planning can often feel like a two-act play. Act one involves what happens if you’re alive but disabled, and act two focuses on the distribution of your assets after your death. A will handles act two, but it doesn’t provide protection for act one. If you have to go into a nursing home and deplete your assets to qualify for Medicaid, a will doesn’t help plan for those things. It only distributes your assets after your death and offers no protection during your lifetime.
Limitation 2: A Will Can’t Grant Access to Your Assets While You’re Alive
In the event that you become incapacitated and require residential care, it’s important to understand that a will doesn’t grant any authority for others to manage your assets during your lifetime. Even if someone is designated as a beneficiary in your will or on your accounts, they do not have the right to access your bank accounts to manage expenses or pay bills. This restriction remains in place regardless of disability status. Individuals such as children or trusted confidants cannot use the provisions of a will to request access to your accounts while you’re living. A will is a posthumous document, effective only upon your demise. If your intention is to permit someone to manage your assets during periods of incapacity, that objective necessitates the creation of valid powers of attorney or suitable trust arrangements.
Limitation 3: A Will Does Not Override Beneficiary Designations
This limitation is crucial to understand. Your will doesn’t override the beneficiary designations on your financial accounts. So, if you list one child as a beneficiary on your retirement account and another on your mutual funds, but your will states that everything should go to your spouse, those beneficiary designations take precedence. Your spouse won’t get everything because assets with beneficiary designations (like retirement accounts, life insurance policies, annuities, etc.) will pass directly to the beneficiaries listed, regardless of what your will states.
As you plan your estate and draft your will or trust documents, it’s important to review your beneficiary designations to ensure your assets go to the people you want them to. Estate planning involves a holistic view of all your assets and plans, not just your will.
Contact Chesapeake Wills and Trusts to Learn what a Will Can and Can’t Do
If you’d like more information or need help with estate planning call us today at 410-590-1900 to schedule a consultation. Our team at Chesapeake Wills and Trusts is here to help guide you through the process and make sure your estate plan matches your wishes and needs.