What’s the Difference Between Will and Estate Planning?

MANY people think of writing a will and preparing an estate plan as one and the same, but there is a crucial difference.

A will governs what happens to your estate after your death and is widely understood, but an estate plan – which includes having a will – is a much wider term that helps protect your wishes while you are alive as well as after you have died.

Preparing a solid estate plan is good practice to look after yourself and your loved ones as life takes its path. It is a comprehensive set of documents covering your finances, healthcare, end-of-life wishes, and distributing your assets after death.

As with all such important matters, taking legal advice to help prepare an estate plan and a will is highly recommended to ensure the plan can and will be followed as you intend.

Not least, an estate plan can grant considerable powers over your affairs to others should the need arise – including literally a life-or-death decision.

A good estate plan will include your will as a centerpiece document. Wills can be surprisingly simple or highly complex affairs, depending on the size of your estate and your wishes for its distribution amongst family and friends.

Common issues covered in a will include who will be responsible for bringing up any children, who takes over running any businesses that may exist, and who gets any assets such as property or specific items, and where any remaining money is to be distributed, whether split between family, friends, or good causes.

Wills require someone to be appointed as an executor, whose job it is to ensure the wishes laid out in the Last Will and Testament are followed through to the conclusion of the estate. This can be a family member, a trusted friend, or a legal professional. Leaving an up to date will is also a gift to your family as it prevents potential disputes over inheritance and can also help save time and money, as dying without a will in place – known as intestate – means a much more complicated process of probate has to take place where your estate is distributed according to the law, which can cause many disagreements and cost considerable legal fees.

An estate plan, by contrast, goes much further than just a will and includes documents active during your lifetime, which grant certain powers over you to other people for specific reasons and at specific times.

Common documents that are often included in an estate plan include:

• A durable power of attorney, designating someone - an agent – to make financial decisions on your behalf. This could be because you have become incapable, or even if you have chosen to have someone manage them for you, such as a business of which you do not wish to be in day-to-day control.

• A healthcare power of attorney, giving power to an agent to make decisions regarding healthcare needs if you are not in a position to make them yourself.

• An advanced directive, giving details about your wishes should life-extending treatment be needed.

• A living will, outlining your beliefs and wishes for end-of-life care if you are unable to make them clear at the time.

Having a solid and comprehensive estate plan and will in place provides peace of mind to you and your loved ones both while you are alive and after your death. Given the importance of the documents and their impact, it is a good idea to have a lawyer work with you to draw them up, and to revisit the plan every few years to ensure it is still up to date and correct as circumstances do change.