As you begin to make plans for preserving your legacy and wealth for loved ones, your first thought is most likely either comprehensive Estate Planning or creating a Will. Often, people may assume that these terms are interchangeable and refer to the same documents. However, when it comes to Estate Planning and Wills, while they often go hand in hand, each document has distinct roles when it comes to settling your Estate upon your passing. State laws and the proper handling of Estate documents is very important to the execution of your Estate plan and to secure your assets and intended beneficiaries.
Understanding Estate Planning documents and their role in your overall plan is important to ensure that you address all aspects of carrying out your Estate directives. Trust & Will, a leader in online Estate Planning services, knows how confusing Estate Planning can be. That is why we will go over each term, their differences, and their significance below.
What is a will?
A Will, often referred to as a Last Will and Testament, in its most simple form, is a document in which you designate who you want to leave your assets to when you pass away. In a Will, you will have the chance to name loved ones or friends as the heirs of your assets, which can include anything from your house to your car, jewelry, clothing, bank accounts, and more.
Your Will also allows you the opportunity to name a Guardian of your minor children to ensure that they will have someone to take responsibility for them if you were to pass away unexpectedly. It is important to note that Nomination of Guardian documents can also be separate from your Will if you would prefer.
Why do you need a will?
A Will is essential to protect your assets and your children. If you do not create a Will before you pass away, all your assets will have to go through a costly and time-consuming probate court process. In probate court, your beneficiaries will likely need to hire a lawyer to help represent them during the probate process to secure and determine how and to whom your assets should be distributed. If your Will must go to court, it will be subject to state laws in regard to distributing assets. By creating a Will, you will have ultimate control over your assets and not waste time and Estate money on unnecessary legal fees.
Trust & Will now offers probate help. Learn more about our different plan option, today.
What is an estate plan?
Your Estate Plan, in its most basic terms, is your plan for transferring your assets and estate after your death. Your Estate Plan will likely include a multitude of different documents—and will provide information on who will manage your assets in the event that you cannot. These documents may include a Will, Trust, Nomination of Guardian papers, Powers of Attorney, Healthcare Directives, and more.
Estate Plans are more than just legal documents that designate asset transfers. They also give you the ability to determine how you want your health managed if you become incapacitated or develop a medical condition that renders you incapable of making decisions for yourself.
If a situation arises in which you are incapacitated for a period of time and cannot make decisions for yourself, you will want to select an individual who can manage your accounts and business dealings, under your specific instruction, until you can hopefully regain control, once more. To do this, you will want to complete Powers of Attorney documents and Healthcare Directives.
Why do you need an estate plan?
Your Estate Plan encompasses all important documents that you will want completed to secure your Estate after you die. If you do not create a comprehensive Estate Plan, you may leave important items unaccounted for, such as your healthcare decisions, who will manage your assets, and how you want certain decisions handled in your absence.
Differences between an estate plan and a will
A Will is different from your Estate Plan because it is its own separate document specifically created to allow you the ability to distribute your estate, name heirs, and give away assets to specific individuals. A Will has set rules for what can be included within it and does not go beyond its assigned scope, meaning that it only covers a portion of the many areas that need to be addressed in planning for your death. A Will is only a segment of an Estate Plan, though a very essential part.
An Estate Plan is a comprehensive set of documents, meaning that it includes more than one specific directive and encompasses all aspects of health and end-of-life planning. As stated above, your Estate Plan can include everything from your Will to your Trust, Powers of Attorney, and Healthcare Directives. Therefore, an Estate Plan is a much more complex document in which Wills are a part of but are not the only component.
Why you need both
If you choose to only create a Will, many aspects of your Estate Plan will be left unaccounted for and left to a probate court’s determination. Additionally, if you were to create an Estate Plan but not include a Will within that plan, you will be missing an essential component of your Estate Plan that you cannot skip out on. Although Wills and Estate Plans have distinct differences, they work together to ensure your passing is a smooth transition for your loved ones, while honoring your wishes as to how your Estate will be handled.
Planning for your end-of-life directives is a necessary process that should not be put off or avoided. You can never know what the future may hold, but you can do your best to prepare for it in advance. Trust & Will’s goal is to help ensure that you are prepared for any event the future may hold. With our online Estate Planning services, making preparations for the future is easier than ever before. Take our free online quiz today to get started!
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