You may be wondering the difference between estate planning vs a will? But the truth is, the last will and testament is simply one of several tools used in the estate planning process. The purpose of estate planning is to provide the opportunity to prepare yourself and your family for death and the possibility of incapacity during your lifetime. There are several different options when it comes to estate planning. Choosing the right one will depend on your individual goals for the future. Your estate planning attorney can help you create the perfect plan.
The Basic Elements of an Estate Plan
An appropriate estate plan should do more than simply state who should get your property after your death. Instead, a comprehensive estate plan should also include instructions for your care if you become disabled or incapacitated before your death. If you have minor children, it should name of a guardian for them. Your estate plan can include provisions for loved ones with special needs or disabilities, as well as, loved ones who may need financial assistance or asset protection. Your estate plan can include distribution of life insurance proceeds for your surviving family, disability income insurance if you become unable to work, and long-term care insurance to assist in financing your medical care in case of an extended illness or injury.
Estate Plans Let You Decide How Your Estate Should Be Handled After Your Death
The other purpose of estate planning is to establish a plan for handling your estate after your death. One of the main estate planning tools used for this purpose is the Last Will and Testament, or Will for short. A will is basically a set of written instructions about how your estate should be distributed upon your death. A will can also give you a way to name a guardian for your minor children. One disadvantage of a will, though, is that your estate must go through the probate process before your assets can be distributed. However, there are other tools you can use to plan.
Most Common Tools Used for Incapacity Planning
Two of the most common tools used in planning for incapacity are Healthcare Powers of Attorney and Financial Powers of Attorney. The Healthcare Power of Attorney lets you appoint a representative who will have the power to make decisions regarding medical care and treatment for you when you cannot. Healthcare Powers of Attorney are generally drafted so that they take effect even in cases of temporary incapacity. While a Financial Power of Attorney does essentially the same thing, the person you select as your agent will have the ability to manage your financial affairs.
The Importance of Planning for Incapacity
The legal definition of capacity is the ability to comprehend the consequences of certain legal proceedings, including entering into contracts or signing legal documents. Incapacity could be caused by either a physical or mental condition and can be temporary or permanent. Now, when it comes to estate planning matters, capacity refers to the ability of an individual to manage his or her own affairs and to make important legal decisions for him or herself. Without an appropriate estate plan that addresses incapacity issues, you might end up being appointed a court-supervised conservator or guardian.
It’s Not Too Late to Create Your Estate Plan
The reason most people delay in creating an estate plan is that they believe they are either too young or do not have sufficient assets. But that is not the case. As your estate planning attorney will tell you, you are never too young to start estate planning. That is because you cannot predict how long you have. Nor can you be sure that an unexpected illness or injury will not leave you incapacitated. In light of this uncertainty, the best course of action is to start your estate plan sooner rather than later. The reality is, the families of those who don’t have a plan are usually left to pick up the pieces without knowing where to start. A will should be part of your estate plan. Let us help.
Join us for a free workshop today! If you have questions regarding estate plans, wills, or any other estate planning matters, contact Gaughan & Connealy for a consultation either online or by calling us at (913) 262-2000.