What’s the Difference Between Estate Planning and Drafting a Will? Many people think that an estate plan is a Will and vice versa. But nothing could be further from the truth. Drafting a Will is an important piece of estate planning, but is only one piece, and in my opinion not the most important part of estate planning.
Drafting a Will only tells people, after you’re gone, who gets what, when, how, and how much. A Will also names the person you want in charge – the executor. A Will alone requires probate to move your assets to those people you’ve picked to get them.
A comprehensive, complete estate plan includes coaching and documents for protecting you, your family, and your assets during your lifetime! A great plan avoids probate, fees, and costs later.
Some of the other documents in a comprehensive estate plan are:
- A Durable Power of Attorney. This tells the world who you want and allow to manage your finances, legal matters, and personal affairs if you can’t or don’t want to.
- A Healthcare Power of Attorney. This very important document tells healthcare professionals such as doctors and nurses who you want to make your healthcare decisions if you can’t. Without it, the decisions are left up to the doctors.
- A HIPAA Waiver (Protected Healthcare Information Release). This allows the doctors, nurses, and other healthcare professionals to share information with the people you’ve named. These people have no decision-making authority.
- A Living Will or Right to Die with Dignity Document. Detail your wishes for life support and under what conditions life support will be used. It works hand-in-hand with your Healthcare Power of Attorney.
- Revocable Living Trust. In certain cases you’ll want a trust as a part of your plan. A trust allows you more flexibility and privacy than a Will alone. You also get a Will as part of this plan. But the Will with a trust is a safety net. When you have a trust, you’ll also get some supporting documents.
- Memorandum of Gifting. Whether you have a Will or Trust, the “memorandum of gifting” allows you to “override” the Will or Trust. In this memo, you can leave gifts of “tangible personal property” to people without the need to rewrite your will or trust to do so. This doesn’t include cash, stocks, bonds, or other securities.
- A Deed or Deeds. Protect your house and real estate from probate and possibly the ravaging cost of long-term care. With the proper planning now, you won’t have to worry about losing your house later.
All these documents work together to create a comprehensive estate plan. A comprehensive estate plan protects you, your family, and your money during your lifetime and beyond. It lets you enjoy the peace of mind you deserve and lessens burdens on loved ones during difficult times.