Wills are important estate planning devices because they dictate how property will be distributed after a person’s death. While wills are recommended and essential in a person’s estate planning process, there are many will substitutes that can serve similar purposes. Will substitutes offer several unique advantages which include that wills do not become part of the public record and in some cases they help to avoid the probate process. A skilled estate planning attorney will help you determine which estate planning device is best for your unique situation.
The Unique Elements of Will Substitutes
Will substitutes allow individuals to transfer their property to a beneficiary without proceeding with a more formal probate process. Not only do they help avoid the probate process, they also often result in fewer complications and allow things to proceed more quickly than other estate planning methods. Additionally, wills often only pass assets to another person after death, while will substitutes allow asset distribution to occur at any point, including while the estate holder is still alive. Another advantage of will substitutes is that they are often easier to amend than wills and sometimes cheaper to execute. As a result, depending on the unique goals of an individual, there are some distinct advantages that can be achieved by using all the available tools during estate planning.
Will substitutes are not without disadvantages and some of these negatives may dissuade people from using them. Will substitutes frequently involve extra costs to set up, can involve certain substantial maintenance costs, and if not properly executed, can result in significant negative tax consequences for the estate holder.
Some of the Most Common Will Substitutes
There are a surprising number of will substitutes in North Dakota. While wills can also be drawn up before a person’s death, will substitutes allow for specific beneficiaries or property to be dealt with in unique and often more effective ways. While there are likely other types of will substitutes based on local laws, some of the most common types of will substitutes include the following:
- Beneficiary designations included in insurance contracts, IRAs, retirement plans, and various other contracts that transfer property.
- Provisions in living trusts and other types of trusts.
- Survivorship rights such as “joint tenancy with right of survivorship” and “tenancy by the entirety” that allow individuals to gain title to an estate holder’s property.
- Terms established in “Payable on Death” and “Transfer on Death” accounts.
- United States Savings Bonds constitute a will substitute and can be used to pass on property at the death of a person. In these cases, the bonds are registered with a “payment on death” or “POD” provision. Provided that Saving Bonds contain these terms, the bonds will belong to a person while living, and at the death of the individual will automatically pass to the person’s designated beneficiary.
Consult with a Knowledgeable Planning and Probate Lawyer
If you require assistance with any element of the estate planning process, the assistance of a skilled attorney can prove to be particularly helpful. Stephen Welle of O’Keeffe O’Brien Lyson Attorneys is waiting to help you today to make sure that your estate planning goals are fully achieved.
Call Steve at 701-235-8000 or 877-235-8002.