Will and Estate Planning: What’s the Difference?
Planning what happens to your possessions in case of your death is a very difficult thing to do. However, this remains a very important thing to do, particularly if you have family or loved ones dependent on you. There are a few binding documents that you can put into place as a contingency strategy in order to make arrangements for belongings. Doing this will enable you to ‘have a say’, even after death.
The two most common documents to get this done are a will and estate plan. Although they often get wrongly thought of as the same document, they are very different and require different processes. In this article, we will give you an overview of a will and estate plan and the main differences between the two.
What Is Will Planning?
A will is a powerful document that allows you to properly allocate your possessions the way you wish to, after your death. You can also appoint your heirs and decide what belongings people get, and decisions on guardianship.
This is usually a fairly uncomplicated process that entails writing a document, where you can dictate who gets to look after your children after your passing. If you have a business you can also appoint someone to take over for you, as well as any other property and assets you may have under your name. In this document, you should also select one individual who will be the executor, who will oversee the instructions you have left on your will, and ensure that they are followed correctly.
It can be a difficult time for family to decide who gets what, and oftentimes this leads to familial disputes. Therefore, having writing will certainly make this easier. It is important to note that a will is part of an estate plan, and this is one of their main differences.
What Is Estate Planning?
Estate planning is a more rigorous procedure that uses diverse types of documents to protect your possessions after your death. Usually, a last will, that we discussed above, is one of these documents.
As mentioned previously, individuals often assume that will planning and estate planning are the exact same document and process. Although their essential objectives may appear interchangeable, they are indeed highly dissimilar procedures. Both deliver your loved ones with guidelines about how your assets should be handled after your passing, however estate planning goes beyond that as it details your wishes concerning your health, finances, and other areas, even while you are still alive. As mentioned above, you can have a last will as one of the documents as part of your estate plan.
Including a Living Will
As we have already discussed, an estate plan can be put into place for decisions to be made whilst you are still alive, and you will require various documents to dictate all of our requests. One of the documents you can include is a Living Will. These documents will clarify the type of medical care you would prefer if you are incapable of speaking, for example, and offer those instructions yourself. This can contain end-of-life care and the use of additional measures. Developing a living will allow you to continue to make decisions even when you are not physically able to do so, and it can also save your relatives money and support them make tough decisions in a difficult and emotional time.
Estate Planning with a Financial Power of Attorney
Oftentimes, people will lose their ability to make decisions, due to a serious illness or mental health. In these cases, it can become extremely difficult for your finances to be managed if you have not specifically been appointed to be in charge of your finances. The financial power of attorney is a document that will do this: it provides instructions on who is granted the power of looking after your finances and allows them to control them and strictly follow the instructions you have left. This selected individual will be allowed to make financial decisions such as transactions, business choices and any other financial decisions, but they would still have to follow the guidance you have left so these decisions reflect your wishes. Doing this protects your assets and provides your family with financial stability.
This is another document that is part of an extensive estate plan. This instructs who will receive money from your savings accounts, or retirement plans, insurance policies and any other savings. If you have any life insurance in place for example, the designated beneficiary will be able to make a claim in your name in order to be entitled to the money. This is a good way to ensure that your loved ones secure financial stability once you pass away.
Hiring an Attorney
Evidently, this can be a complex process, requiring many different legal documents from you.to be put into place. Hiring a professional will benefit you as estate planning attorneys can support you to decide what kind of planning you require and can help you with putting all of the necessary documents together for a complete estate plan that will effortlessly and exactly allocate your assets and other decisions after your death. The folks at Heritage Elder Law agree that hiring a professional is essential as they are qualified and knowledgeable in this area, ensuring that everything is done correctly. You should be careful if you’re calling the family lawyer to handle these matters, since there are a lot of factors that can tilt their loyalty.
Who Needs an Estate Plan?
People do not tend to give this much thought, unless you have large amounts of money and assets in your possession. However, it is always important to have an estate plan in place, to secure and protect yourself, your assets and your family as well. Unfortunately, old age is not the only reason for someone to die, and this could happen anywhere as a result of an accident. We can also get seriously injured and incapable of making important decisions. If this happens, having an estate plan will at least ensure that you can still receive the treatment you want and ensure someone is able to look after any young children you may have, as well as every other aspect in your life is taken care of.
When we die, we may leave behind assets and money that we worked for our whole lives and it is important that these are protected. Although a will enables you to dictate who gets what, an estate plan is a much more in depth document that includes a will and allows you to even make your own health decisions if you become incapable of doing so whilst living.