It’s normal to feel overwhelmed when you’re starting the Estate Planning process. In fact, it’s not just normal, it’s also understandable. There are a lot of concepts involved in Estate Planning. But the easiest way to get through the process is one step at a time.
One of the first things you should try to understand is what the different types of Wills are. Knowing which Will is right for your needs is important, so you can feel confident you’re setting up exactly what you need to protect your legacy and take care of your loved ones in the future. Keep reading to learn more about the multiple types of Wills available.
How many different types of Wills are there?
There are many different types of Wills to choose from. They widely differ from each other, and truth be told, any one really isn’t superior to, or better than, another. The best Will just depends on a combination of your current situation and any future goals you have about what you want your Beneficiaries to inherit. Here we’ll discuss, in detail, several types of Wills.
1: Living Will
Despite the similarity in name, a Living Will actually does a lot more than a traditional Last Will and Testament can. Also called an Advance Healthcare Directive, a Living Will is good for end-of-life planning and to make your wishes known regarding medical care you may want in the future.
In the event you become incapacitated for any reason and you can’t let doctors or loved ones know what you want, a Living Will can speak for you. The benefit of a Living Will is it greatly eases the burden on loved ones if tough decisions need to be made on your behalf. Note that Living Wills become immediately ineffective once you pass away.
CAVEAT: Make sure your Living Will is valid in and specific to your state, as requirements can vary.
2: Testamentary Trust Will
Testamentary Trust Wills are sometimes referred to as Will Trusts or as Trust Under Wills. They are written inside a Will and can be used to direct asset distribution after your passing. This type of Trust differs from other Trusts in that it isn’t actually formed until after your death. Testamentary Trust Wills can be a good option if you need to set up long-term care for Beneficiaries.
CAVEAT: Whereas most Trusts allow you to avoid it, Testamentary Trust Wills will go through probate, which can be a significant disadvantage.
3: Pour-Over Will
Pour-Over Wills work in conjunction with Revocable Living Trusts. They are designed to offer more privacy than a regular Last Will and Testament and work by “pouring over” any assets that don’t directly go to a Beneficiary into your Trust after you pass away. Pour-Over Wills are useful if you haven’t put everything into your Trust.
CAVEAT: Property must go through probate before it ends up in your Trust, which can take time and money and cause stress on your loved ones.
4: Simple Will
Simple Wills, much like the name suggests, are simple in that they do not contain a lot of clauses. However, just because they’re simplistic in nature doesn’t mean they can’t be effective. You can do much of your basic planning in a Simple Will, including designating a guardian for minors and appointing an Executor.
CAVEAT: Simple Wills may not be the best option for very complicated or large estates.
5: Joint Will
Joint Wills are a Will within one document for two people. They can be used in cases where spouses want to initially make each other Beneficiaries after one passes, and then establish final Beneficiaries being a child or children once both partners are gone.
CAVEAT: It’s important to note that Joint Wills automatically become irrevocable upon the first spouse’s death.
6: Deathbed Will
Deathbed Wills are not desirable for several reasons. The biggest one being they are not as effective as other types of Wills. Made on a deathbed, and most of the time under dire circumstances, there are often questions about mental stability and how comprehensive a Deathbed Will is.
CAVEAT: While any Will is better than none at all, Deathbed Wills are more than likely to create problems for your loved ones after you pass.
7: Online Will
Relatively speaking, Online Wills are a fairly new concept in the world of Estate Planning. It’s true that there are very trustworthy, authoritative sources out there to help you create an effective and adequate Online Will. But you need to be careful about which DIY online company you use to create your Will or any other Estate Planning documents.
CAVEAT: Not all Online Will companies are the same. It’s an absolute must that you read online reviews. And most importantly, be sure that whichever company you go with has state-specific documents and forms that are created, drawn up and reviewed by actual lawyers and Estate Planning experts.
8: Holographic Will
While not all that common, Holographic Wills do actually still occasionally exist. These are handwritten Wills and are typically the result of extreme, unexpected circumstances such as war or another life-threatening situation.
CAVEAT: Holographic Wills are not recognized as valid in every state.
9: Nuncupative Will
Nuncupative Wills are a verbal explanation that expresses final wishes. Like Holographic Wills, Nuncupative Wills are not recognized in every state. Additionally, some states have strict stipulations on what would qualify as a valid Nuncupative Will. For example, a state may recognize them, but only if they’re written down after being spoken.
CAVEAT: Despite the fact that some states will accept a Nuncupative Will as valid (under certain circumstances), most often, if made by a civilian, they will not be recognized.
Whatever type of Will you end up using, the important thing is that you put some sort of Estate Plan in place. Planning for the future, especially one you know you won’t be in, can be difficult. But it’s one of the smartest, and kindest, things you can do for your loved ones. Making decisions for them today, so they aren’t faced with trying to navigate your loss not knowing what you want, truly is a way to leave a loving legacy that will last. Read more about Wills today, and if you’re ready to create or update your Will, reach out to Trust & Will to get started.