If estate planning is on your to-do list, you might be wondering if writing a will is enough.
Your will, however, is just one portion of estate planning.
In this blog, we explain the difference between writing a will and estate planning and describe the different documents that make up an estate plan.
What Is Estate Planning?
Estate planning is the process of preparing your affairs in anticipation of death or incapacity.
It involves rearranging assets and executing documents so that your wishes are carried out.
Many people think estate planning is only about finances and transferring assets after death, but it involves much more.
A comprehensive estate plan includes planning for your family’s needs, your medical care, and your legacy.
Now let’s take a look at estate planning vs a will.
What Is the Difference Between a Will and Estate Planning?
We talked about executing documents as part of the estate planning process. A will (or last will and testament) is one of those documents.
Your will is what provides instructions on how to distribute your assets after death.
With this document, you can also name an executor to handle your estate and choose a guardian for any minor or disabled children.
When it comes to understanding an estate plan vs a will, remember that drafting a will is part of estate planning, but there’s much more to it.
What Does an Estate Plan Include?
No two people are the same. Their finances, families, tax brackets, medical needs, and goals differ. So no two estate plans are the same.
However, there are some fundamental documents that make up a complete estate plan.
Last Will and Testament
As discussed above, a will is the legal document that spells out your wishes regarding your assets and your children.
Your will goes into effect only once you die. Up until that point, you can change its terms however you see fit.
Without a will, a probate court will distribute your estate according to Texas intestate succession law.
Essentially, the state creates a will for you, and certain family members inherit based on their relationship to you. If this doesn’t sound ideal, it’s best to hire an estate planning attorney to write your will for you.
They’ll ensure your will meets all Texas requirements and is enforceable when the time comes.
Financial Power of Attorney
A financial power of attorney grants a person (the agent) decision-making authority for someone else.
There are several different types of powers of attorney, but you can choose how broad or limited the agent’s authority is.
With a durable power of attorney, the document stays in effect even after you lose your capacity to make decisions.
It’s important to select an agent you trust and who is capable of handling your affairs appropriately.
Living Will or Directive to Physicians
A living will is much different than a last will and testament. A living will communicate your wishes regarding medical care if you lose the ability to make those decisions.
Another term for this document is an “advanced medical directive” or “directive to physicians.”
With a living will, you choose the type of treatment you want to receive, such as resuscitation, life-sustaining treatments, artificial nutrition and hydration, and pain management.
You can even provide details about your funeral arrangements.
Medical Power of Attorney
A medical power of attorney grants an agent the authority to make medical decisions for you.
To ensure your health care agent can effectively do their job, you should also execute a HIPAA waiver. This way, the agent can access your medical records.
Although not for everyone, trusts are an effective estate planning tool. A trust is a separate entity that holds legal title to assets.
A trustee is responsible for maintaining the assets for the benefit of someone else. Trusts offer protection against creditors, provide tax advantages, and help your family avoid the probate process.
Trusts come in different forms and serve different purposes.
Let Our Estate Planning Attorneys Help You
Estate planning goes much farther than drafting a will. At Massingill Attorneys & Counselors at Law, we work closely with our clients to understand their estate planning goals and develop a strategy that meets their needs.
With the help of our estate planning attorneys, you can craft an estate plan that organizes your affairs, protects the people you love, and gives you peace of mind.
With over 150 5-star Google reviews, we know how to provide exceptional legal service to families in and around Austin, Texas.
We offer unlimited pre-execution revisions to your will and estate planning documents, as well as a 90-day guarantee.