There is a common misconception that a Will and estate are the same things. It’s true that both an estate plan and a Will are similar but that doesn’t mean both are the same. People believe that a Will is for everyone while estate planning is for wealthy individuals who own mansions, yachts, and millions in other assets. However, this isn’t the case! Estate simply means whatever you have and leave behind for loved ones. A Will also perform the same function but it is only a part of the estate plan. It means that estate planning is a broader term that includes multiple legal documents that may come into effect during your life or after your death. A Will, on the other hand, comes into effect upon your death. To know more about Will and Estate Plan, let’s dig a little deeper.
What Is a Will?
A Will or last testament is a quick straight forward document. It is simply a legal document that contains your last wishes that you want to be fulfilled after your death. The primary purpose of a Will is the distribution of your assets and wealth. It contains a list of everything valuable you own such as real estate, bank accounts, cars, diamonds, antiques, valuable paintings, investments, and other assets. Creating a Will allows you to have a say in who gets what and how much. Besides the distribution of assets, you can also make decisions for your minor children. You can choose guardians for your kids and name an executor responsible for carrying out the actions in your will.
What Is Estate Planning?
Estate planning is a wider term and is more complex than writing a will. A Will is a single document while a comprehensive estate plan includes multiple documents like a trust, Will, and power of attorney. Having an estate plan means you can create a durable power of attorney for your finances and healthcare power of attorney for medical decisions. Unlike a Will which safeguards your loved one’s future after your death; an estate plan also protects you if you become incapacitated. Have you ever thought about what will happen to your business or who will make healthcare decisions on your behalf if you become incapable of handling your affairs? Estate planning not only determines how your assets will be distributed after your death but also gives you control over your decisions during your life.
Difference between Estate Planning and a Will
As mentioned above, a Will is a part of the complete estate plan. A Will allows the transfer of your assets upon your death while an estate plan consists of more than one legal document that can be used during life or after death. Estate planning is more complex than writing a Will. It is more than simply the distribution of your assets upon your death. It includes healthcare directives and power of attorneys, and other documents that allow you to appoint someone trustworthy to act on your behalf if you’re unable to take your own decisions. It ensures that your financial matters and medical care are taken care of in your best interest. With the help of an experienced estate planning lawyer, you can also reduce inheritance taxes.
