Will Planning and Estate Planning: What's the Difference?
When you set out to make arrangements for the handling of your estate after your death, you will undoubtedly come across the terms will planning and estate planning. These processes both allow you to provide instructions for the distribution of your estate and to name beneficiaries. It is, therefore, understandable to brand will planning and estate planning as identical processes.
Yet, they have some glaring differences that set them apart. Estate planning, for example, is more comprehensive and detailed. It gives you extra room to expressly state your wishes and interests on aspects like healthcare, real estate, and finances. Finding a good estate planning lawyer can be an essential first step as they will help you figure out which documents are appropriate to your unique situation. Remember, the end goal is to ensure that after your death, your estate is distributed according to your exact wishes, inclinations, and interests.
Will Planning Vs Estate Planning
Will Planning and what it entails is something most people are familiar with. It allows you to leave legally binding instructions about the distribution of your wealth in a Last Will and Testament. These instructions cover who your beneficiaries will be and the assets they will receive. You can also include the guardianship of minor dependents, dispositions for your spouse and heirs, and more.
You are required to name at least one representative in your will who is called an executor. After your death, this executor is then authorized to carry out the instructions you outlined in your will. If no will is available when you pass on, the fate of your estate will be determined by state law. The court will also appoint an executor to oversee your estate. However, this may not help to avoid confusion and costly battles among your family, friends, and loved ones.
Estate planning can be more elaborate and intricate since it incorporates several documents that center on the distribution of your assets upon your incapacitation or death. However, will planning can be one process involved during estate planning. Other documents that may be included in the estate planning process are as follows:
As indicated by the name, a living will establishes a set of instructions for when you are still alive. It specifies your particular preferences when it comes to health care and the type of medical treatment you would want to receive if you become incapacitated and unable to make these decisions for yourself. It also dictates the course of action your health care providers should take in emergency situations that require resuscitation, and artificial interventions such as life support. This legal document makes things easier and more straightforward for you and your family as it puts your wishes first and foremost.
Financial Power of Attorney
This document authorizes a named appointee to oversee your financial affairs should you be unable to do so. The appointed individual will operate within the framework of instructions you have set out for them in the document. You can assign them responsibilities that involve bill payments, taking care of tax-related issues and allocation of funds to your family. Doing so ensures your family is well provided for in any event, and your financial assets are not abused or handled irresponsibly.
While you can name your beneficiaries and give instructions for the allocation of your assets in a will, beneficiary designations are other documents that help you to reinforce your wishes and interests regarding the distribution of such assets. They enable you to provide detailed, in-depth instructions such as who receives family heirlooms, certain financial investment returns, and life insurance policies. These specifications emphasize and protect your wishes after your death. They also help to secure the welfare of your loved ones when you are no longer around to take care of them.
Do you need an estate plan?
All the documents involved in estate planning complement one another; they work to achieve the common, solid goal of protecting your estate and your express wishes regarding that estate. Comprehensive estate plans leave your loved ones with no doubt as to what you would have wanted and why you would have wanted it. Whether the issue is donating to charity, securing trust funds for your children, or allocating your wealth only to specific people, you can be assured that your requests and instructions will be followed to the letter. This gives you invaluable peace of mind as it avoids mismanagement of your estate and affairs.
Estate planning can protect your privacy
Having all your affairs aired out in public even after you have passed on is not an attractive notion. Fortunately, most estate planning documents protect your privacy and that of your family. Although a will becomes a matter of public record after you die, having a comprehensive estate plan will protect your estate from being handled publicly by probate courts. Overall, your chosen beneficiaries receive airtight legal permission to inherit your assets which saves time, money, and complications for all involved.
When all is said and done, the best course of action is to consult with a reputable estate planning attorney. They are qualified to give the best advice and methods of creating a well-suited estate plan that embodies the entire scope of your wishes for your estate when you die.