Do you know the difference between Estate planning and a Will? When it comes to protecting the assets and future of our loved ones, most people think about creating a Will. Drafting a Will is certainly crucial but it isn’t a complete solution. Both will and estate plans are legal documents that define the distribution of your assets. Writing a will and estate planning go hand in hand but in entirely different terms. An estate plan is a broader term that covers all your assets during your life, as well as after you pass away. A Will is a legal document that defines who inherits your assets after you die. This document may also include the name of the guardians of your minor children. However, an estate plan is a more comprehensive document that not only defines the distribution of your assets upon your death but also takes care of your financial and medical affairs in the event you become incapacitated. To know more about estate planning, let’s dig a little deeper to know its need and importance.

What is Estate Planning?

An estate plan is a legal set of documents that may apply during your life as well as after your death. Unlike a Will which is a single document, an estate plan includes a set of legal documents such as a Will, trusts, power of attorneys, and more. It means that an estate plan is much more than a simple distribution of your assets upon your death. This document also takes care of your medical and financial needs in case you ever become incapacitated. It includes both durable powers of attorney for your finances and healthcare power of attorney for medical decisions during your life.  A Will is a part of an estate plan that includes details of your assets distribution and child care after your death.

Estate planning is for everyone who owns a house, savings account, cars, investments, insurance plans, and other valuable assets. Creating an estate plan allows you to have a say in how wealth is distributed to the people or charitable organizations you care about. Life is uncertain, which makes it crucial to plan for unfortunate events. Those who die without leaving a Will or estate plan give state law and probate court complete authority to make decisions on your behalf. Besides wealth distribution, you would also want to have a say in your financial and medical affairs if you even become incapacitated during life. So, an estate plan is a comprehensive document that consists of a Will which includes:

• Bank accounts
• Home and other real estates
• Vehicles
• Life insurance
• Investments
• Your personal possessions like precious paintings & jewellery

Why Do You Need an Estate Plan?

Without a will or estate plan, your heirs may have to face difficulties in going through the probate court system and figuring out how to divide up your assets. A Will protects your loved ones after your death but an estate plan safeguards your interest during your lifetime. The documents included in an estate plan are:

• Will
• Living Trust
• Durable Power of Attorney for finance
• Healthcare Directives
• Living Wills

Every person has a different situation and needs a unique solution. The estate planning needs of a single person living in a rented apartment are much simpler than a married person who owns a house and has kids. Estate planning becomes even more important for those who own several properties and are married more than once. A remarried person with children from both marriages will have a complex estate plan. Irrespective of your life situation and family dynamics, it’s crucial to hire a qualified estate planning attorney to get a customized estate plan.

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