What Is The Difference Between A Will And Estate Planning?
The process of estate planning and drafting a will are two different processes that are commonly confused. These two processes can be beneficial to one another but understanding the difference between the two can be extremely important. These are not interchangeable processes and having a will doesn’t necessarily mean that you have a proper estate plan. Knowing the difference between the two can make sure that you will be able to plan appropriately and stay organized with your estate. This article is going to cover some of the differences between an estate plan and a will.
Estate plans are a comprehensive plan that includes various documents that are effective during your lifetime as well as documents that will become important if you were to pass away. An estate plan allows you to introduce various conditions that could occur if you were to get sick, if you lost your job or if you needed somebody to make medical decisions for you. These documents will allow you to create a plan for who has the power to make financial and healthcare decisions on your behalf if you were to be unable to. You’ll also be able to determine who will receive your assets if you were to pass away.
An estate plan can include a variety of documents such as:
Appointing a durable power of attorney or an agent who can handle your finances if you’re incapacitated.
I healthcare power of attorney which means an agent to make medical decisions for you if you are incapacitated.
The advance directive will detail your decisions on treatments that will prolong life.
A will is an important part of an estate plan but will detail will only help you to express the details of who will get your assets on your death. Your will can also serve as a guide on who will act as the guardian of any minor children. Your will and testament will provide the names of an executor who is going to be in charge of distributing assets to people on your death as well as to various charities. A will document will only cover a plan for when you pass away and it will not include any of the items associated with who makes decisions when you’re sick and more.
Having a comprehensive estate plan can give you incredible peace of mind. Knowing that you have plans in place for any detrimental effect that could happen in your life can be important to maintaining your quality of life as well as protecting more of your assets for future generations. The documents that combine to form an estate plan can lessen your burden on your loved ones and make sure that you have an appropriate plan for the future. If you just have a last will and testament is very important to consider that many of your wishes in life could go unchecked if you don’t have an appropriate estate plan in place to manage your finances, health, and more.
Having an appropriate estate plan in place can provide you with some of these have benefits
Reducing Estate Taxes
Federal estate taxes and inheritance taxes can result in significant losses to your assets. Rather than burdening your inheritors, you can eliminate various estate taxes by setting up joint partner trusts and other aspects of estate planning.
Preventing Unwanted Inheritance
Even with a prewritten will, there can be changes that might occur throughout your life. Having a proper succession clause in your will or various amendments to your estate plan will make sure that you can prevent unwanted inheritance.
Avoiding The Probate Process
A proper estate plan can help you to avoid the probate process which can often be expensive. By being able to name a trustee as well as name representatives that can help you manage your assets when you’re incapacitated, you will have an easier time avoiding the probate process and properly planning the future of your state.
Avoiding Disputes And Burdens On Your Family
A proper estate plan will prevent various conflicts within your family and the chance that you can avoid disputes. Because your wishes will be shared expressly based on your condition in life as well as plans for your death, you can have a series of clauses that can make sure your wishes are truly hurt. By having a plan for several potential outcomes, you can help to prevent burdens on your family and make sure that disputes don’t occur between your family members. Things can get messy after a family member gets sick or passes away unexpectedly, an estate plan can help to minimize some of the stress and ensure your wishes are carried out.
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