Will vs Estate Planning: What Are the Differences?
Here are some statistics you may find shocking. 55% of Americans pass away and do not have a will or estate plan, while 15% of Americans who are making more than $150,000 per year have a will that is “up-to-date.”
While it may seem morbid thinking about your end of life, it also brings peace knowing that what you have will go to who you want it to go.
What can be challenging for many people is understanding the difference between will vs estate planning.
In this article, you will understand exactly what makes them different and how it affects you and your property upon your untimely death. Keep reading for some peace of mind to help you plan accordingly.
What Is a Will?
This is a legal document. It contains the details of how you want to give your assets upon your death. It may also contain details on how you want your children to be cared for when you pass away.
A will has in it the name of the executor. This individual is responsible for carrying out the actions as detailed in the will.
Estate planning attorneys can help you write a will. It’s a good idea to have an expert help you write a will because it will have defined terms. Without it, your family could end up fighting, even spending a lot of time and money to divvy up your assets.
What Is Estate Planning?
This refers to something much broader in scope than writing a will. A will is one tool, while an estate plan has multiple tools. Common inclusions include:
- Advance directives
- Powers of Attorney
These are to name a few. There are more.
For the power of attorney in an estate plan, your finances could have one, and your healthcare can assign another regarding medical decisions.
If you have a complex estate, you may need an estate planning attorney to help you with trusts, estate planning tools, and complicated wills. You could choose to donate to a charity for offsetting taxes on your assets that can eventually be given to heirs.
A will may be enough, though, if you feel your loved ones will distribute your estate and will act upon your wishes accordingly.
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Estate Planning Guide
Wills are a piece of the estate plan. An estate plan is more than the will alone. They both are under what you call “estate planning.”
It is important to understand the benefits of both and their limitations.
An estate plan has a legal document collection, whereas a will is one legal document. When you have an estate plan, it can take care of other matters related to the estate that you cannot provide detail on in the will.
A will is a good start. However, consider estate planning too.
Will vs Estate Planning
Now that you understand the difference between will vs estate planning, you can begin preparing. In case of death, it helps to know that there are legal parameters to carry out your wishes as you specify them.
For more advice that can offer you tranquility and food for thought, read the many articles we have. We have tons of helpful advice, just like this!