Many people confuse the terms “will planning” and “estate planning.” In reality, they are two different processes with separate requirements. Let’s take a closer look.
What is Estate Planning?
Estate planning encompasses will planning, as creating a Last Will and Testament is a step in the overall process. However, the estate planning procedure is more involved. When you are estate planning, you create various documents that secure your assets after your death and provide instructions even while you’re living.
For example, your estate plan includes directions regarding your healthcare, who controls your finances, etc. should you become physically or mentally disabled before passing away. If you have minor children, you may wish to designate a legal guardian to care for them in the event that you lose your physical abilities.
Proper estate planning includes the drafting of various legal documents. With the help of an estate planning attorney, you can create a detailed list of instructions for both before and after your passing. This helps avoid legal confusion down the road.
What is Will Planning?
Your last will and testament is a sub-task of estate planning. However, it specifically states where you want your assets to go after you pass. Solely-owned bank accounts, real estate, personal belongings, etc. must be designated to specific loved ones or charities. If you fail to leave a will behind, the state obtains authority and rules on who gets what.
Estate planning is important because not all assets are included in your last will. Some items must be designated while you are still alive, such as the following.
- Life insurance
- Joint bank accounts
- Shared property
- 401(k) funds with a valid beneficiary
- Anything attached to a TOD (transfer on death) account or TOD deed
When Should You Create Your Will?
It is rarely wise to put off writing your will. Nobody likes to think about death, especially when they are young and healthy. However, no one is guaranteed another day, and it is always best to have a will in place just in case. An attorney can help you with an estate plan as well as draft a last will.
Don’t Forget to Register Your Will
Creating your will is the first step. Registering your will is the second step. If your family does not know where your will is stored, it can cause a lot of confusion down the road. Make sure to register your will so your family can look up your information when the time comes.
The U.S. Will Registry was founded in 1997 to fill an important gap. A registered will is stored in a database for later access. We provide families and beneficiaries with a means to find lost wills and estate planning documents of those who have passed away.