24 Jun What’s the Difference Between a Will & an Estate Plan?
The easiest way to understand the difference between a will and an estate plan is that a will is a part of an estate plan.
An estate plan can encompass all kinds of documents that set into place how and when your assets and estate will be divided upon your passing, and to whom.
Let’s examine in a little more detail what an estate plan entails, and how a will fits into that equation, as well.
What is an estate plan?
Estate planning, at its most basic, provides your family with a comprehensive plan for what you would like done in the wake of your death.
It involves the most important aspects of your life — assets you’ve worked hard to grow, possessions you value and treasure, and the people you love and care about.
Some estate plans also include provisions for what to do while you’re still alive but incapacitated. There are certain basic documents within the estate plan to rely upon for anyone 18 or older to address an emergency that should arise while you’re still alive.
Either way, an estate plan makes sure that your wishes are known by your loved ones, which helps reduce the risk of family disputes over your assets after your death.
What is a will?
Compared to the entire process of estate planning, a will is really pretty simple.
Your will expresses your wishes as to how your property should be distributed after your death. It also lays out who will be the person managing your property until the process is finished, known as an executor.
Your will might include any of all of the following information:
- Who should take care of your children
- Who should take over your business (if you have one)
- Who receives your assets
- Who receives your other property
There’s also something known as a living will (we usually refer to it as an Advanced Healthcare Directive), which allows you to dictate your requests while you are still living — for example, the type of medical care you would like, end-of-life care, etc. This document helps your family make difficult decisions that they otherwise may not know how to make.
[A note about the pitfalls of wills: A will is only effective once it’s been sent to probate court, the probate court reviews and accepts it, and then ultimately appoints someone as executor. So by its very nature a will uses a probate proceeding.]
What else can be included in an estate plan?
In addition to the will and Advanced Healthcare Directive, there are all kinds of other documents and provisions that can be included in your estate plan to help your loved ones understand your wishes.
Some of these other documents include:
A trust is a great way to have a little more control over what happens to your assets, particularly in comparison to a will. There are two main types of trusts – revocable and irrevocable. A revocable trust is easy to use because it can be amended or revoked at any time. While you’re alive and well, you’re the trustee of your own trust – maintaining full control, but once you’ve passed away or become incapacitated, we’d have a successor trustee named in the trust document itself that would then take over.
- Durable Power of Attorney
With a POA, you’re naming someone who can make decisions and take actions for you with regard to your legal, financial, personal affairs. For example, if you are unexpectedly ill and can no longer manage your own affairs, you need a POA in place to allow someone to be able to quickly and easily step in and take the actions that you can’t (paying bills, running your business, etc.).
- HIPAA Patient Authorization
This is a document that states anyone listed in that document has access to your medical information and can speak with your doctors. This can go a long way to making other family members and loved ones feel included and involved in a difficult decision process.
- Beneficiary designations
- Directions for transfer of property and financial assets
Contact Candice O’Neil Today
If you are ready to move forward with putting a plan in place, contact Attorney Candice O’Neil today. We are happy to go over any questions that you might have and give you some peace of mind by having these documents in place.