When you hear the words "estate planning," do you think of creating a will? Most people correlate wills with estate plans, and many people think these are the same thing. While they are similar, they are not the same thing. If you are thinking about planning your estate, it might be helpful to understand the differences between a will and estate planning.
The Basics of a Last Will and Testament
When you use the word "will," you are talking about a document called a last will and testament. In movies, you will often see a lawyer reading this document to a family after their loved one dies. In reality, this is what happens when a person dies. The family looks for the will or visits the person's lawyer, and they read this document.
A will is an essential tool to create before you die, as it provides instructions to your family about vital things. It tells your family who oversees the settling the will and estate and reveals who gets the deceased person's assets. A will also tells the family how to handle the person's funeral services, and it may also provide a lot of other details. A will is vital, yet it is only one aspect of estate planning.
The Basics of Estate Planning
Estate planning is the process a person uses to prepare for death. An estate plan should contain a will, as a will states essential details, but an estate plan can include much more than this. An estate plan allows a person to create a trust and other tools.
A trust is something you create for protection. You create it while you are alive, and you place your assets in it. Once you do this, your assets are safe. After you die, the assets in the trust will easily transfer to your beneficiaries. Having a trust speeds up the asset transfer after you die, and it eliminates the need for probate court.
Additionally, you can use other tools in your estate plan. For example, you can create a living will. This document tells your family how to handle medical decisions if you cannot make them yourself.
The Bottom Line
Having a will is an essential part of your estate, but it is not the only part of an estate plan. You can find out more about estate planning by meeting with a lawyer that offers estate planning services.Share
16 June 2020
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