Ep. 24 - The Will - Least Important Document In An Estate Plan

GSLAW Episode 24

Narrator: [: 00:00:00

Welcome

I need to get my wheel done [: 00:01:00

If, if we are using a will in anyone's estate plan, that means we did something wrong. Um, and what I mean by that is my goal with every plan we do is to avoid probate. And what a lot of people don't know is a will mandates probate. So a will has to go through probate. And like I said, my goal is to avoid probate.

So we'll kind of talk about why a will is not important and we hope it's never used. Um, but I will, uh, name a couple instances where we do need a will and it's valuable that we have it at the end, but generally let's start with what is a will. So a will covers your assets. Basically it says where your stuff goes when you pass away.

personal representative. And [: 00:02:00

Uh, will is your beneficiaries. So you name who gets what you name, what they get, how they get it, when they get it in a wheel. You say, I want my kids to get all my money and I want my, um, friend to get my tractor. You know, you can get specific within a will and say all that. So those are the main elements of a will.

But why I say it's bad is because a will has to go through probate. So what a will does is it tells the court where your stuff goes and how it gets there. And the key word there is court. So, uh, the court led process of administering a will is called probate. And why I think probate's bad is we do a lot of them in my office and we get paid to do them.

Sometimes they pay really [: 00:03:00

Um, it is public, so anything you do is in the public eye, meaning everything's filed with the court, that means everyone can look up what you own and who's getting it, so they know all your business, so everything is public. And if your family's fighting over something, that's in the public eye as well. Um, the other thing is, is it costly?

f you think about it, if you [: 00:04:00

So it can be very expensive. Um, and that's generally what probate is. But when you have a will, it has to be submitted to the court and approved to administer. So if you die with a will, it's called test state. If you die without a will, it's called intestate. The only difference in that is they both go to court, but intestate follows the statutory laws about who gets what.

Test date follows your will. So your will says where things go. Um, and kind of generally how the process works. I won't bore you all with probate, but you know, when someone passes away and comes to us with a will, we have to then gather death certificates, get an idea of all the assets, all the beneficiaries there are, and submit the will with a petition to the court.

, yes, this is a valid will, [: 00:05:00

And then you have to file a notice with the paper, um, to say that. Someone passed away, we've started the probate process, and the purpose of this notice is to give creditors a chance to lay their claims, so if you pass away owing somebody money, then your creditors can, um, state a claim with the court and to get their money back.

Now, the time period starts as soon as you file that notice with the paper and file it with the court, then a six month waiting period starts, so you're in the middle of a six month waiting period no matter what you do, um, because you have to give those creditors six months. to file their claim. Um, so that's why we say a probate at least last six months.

eriod and you wait to see if [: 00:06:00

I would say most, but a lot of them do. We have one going right now that's well over a year. Um, so probates are usually not a fun process. So when I start, um, thinking about my clients, I say, how do we avoid probate? And that's why my goal is to never use the will. Cause if we're using a wheel, we're in the probate court, but you can avoid a probate by simply getting beneficiaries listed on your accounts.

ies listed on your accounts, [: 00:07:00

So your heirs are not stuck in the court system. Um, and it's really that easy. So the only thing you're, if you applied for everything, right? The only thing your wheel would control is your personal property. And as long as that personal property is under a hundred thousand dollars, which it usually is.

Then you don't have to go through a full probate in Arkansas. So that's why I say a will is the most useless document there is, because if you're using it, that means you didn't get a beneficiary listed on your account or you had a trust and it did not get funded properly. Um, I'll give one recent example of how useless the wheel actually is.

go to my daughter. And they [: 00:08:00

They wanted it to go to the daughter, but they did not list a beneficiary on that IRA. So because they thought their wheel would take care of that, they knew and understood that it would have to go through probate, but they thought that their wheel would take care of it. They didn't want to list a beneficiary on the account for whatever reason, but that's how useless the wheel is because that large financial advisor has an internal policy that says, if you do not have a beneficiary listed on your account, the IRA goes to the heirs at law.

Regardless of whether there's a will or not. So we opened the probate, filed the will with the court, took care of everything. But because they had a specific separate contract with this IRA, that means the people he wanted to specifically disinherit got a share of the IRA, all because he didn't list a beneficiary.

, private contracts, trusts, [: 00:09:00

And I will say the main one is for guardianships. So if you have, or a Parent with young kids, you need a will to name a guardian for your kids. And that is one of the most important things you can do. So everyone with young kids needs a will because you need to name a guardian. And why that's done is you, you name a guardian in your will.

And the judge wants to be sure. And, you know, our state and our public policy laws want to be sure that whoever's name is guardian is capable of raising a minor child. So that's why it has to go through the probate process. You submit that wheel to the guardianship court, which is also the probate court.

re not on drugs, they're not [: 00:10:00

Now. Side note, we also name our guardian and our power of attorney because a will comes into play when you pass away, but a power of attorney names the guardian of who could be your kids, you know, just if you're incapacitated or maybe out of the country, you know, your power of attorney controls while you're living.

So really, you name a guardian in two places. But that is one reason a will is important. Now, the other reason is a little more obscure, but we always do a will for clients, even if they have a trust with us. Um, even if they don't are, we help set up clients, beneficiary designations, you know, deeds on their property to avoid probate.

still do a wheel for certain [: 00:11:00

So I think of it like an airbag that it's a document that we have and. We're glad it's there, but we hope we never have to use it because we hope we're never in that car wreck, but this applies to things that, um, if you had to trust things that didn't get into it, maybe through some fault of your own, maybe you forgot about an asset, maybe there was an investment account over there from an old job that you forgot about, then the poor over will says, put that in my trust.

what his poor will said is. [: 00:12:00

So even with that poor over will, we still don't know what he owned or who it went to. We just know he had a trust and everything went in there. But what that told me is they left something out of the trust, maybe accidentally, or they were just doing it as a precautionary measure, um, for any future royalties or, uh, money that he may come into.

They filed this. Uh, will with the court to make sure everything he has goes to his trust and the beneficiaries he names. Um, one other unique example is, you know, say you are in a accident with, uh, you know, a car accident with a big rig and your estate wins a lawsuit for. Uh, that accidental death with the big rig, that's money you don't know about while you're living.

ys where that money will go. [: 00:13:00

Hopefully we never use a wheel and hopefully it is a document that sits in the back of your estate planning binder and collects dust because that is a good estate plan. One that never actually has to use the will. And thank you for listening to this episode of the good steward law and wealth. Podcast where we consider everything's a gift and it's our job to manage those gifts to the best of our ability.

Narrator: Thank you for tuning in to the Good Steward Law Wealth Podcast. If you're ready to take control of your financial future, visit GoodStewardFirm. com to book a meeting and sign up for our newsletter.