What’s the Difference Between Will Planning and Estate Planning?
Many people think that Will planning and estate planning are one and the same. But that is just not true. Did you know that a Will is just a small part of estate planning? Today we’re going to dive into what Will planning and estate planning are, and why you need to do both.
Will Planning
You’ve heard it from us, you’ve heard it from your financial advisor, you’ve probably heard it on TV or the radio: everyone needs a Will. And Will planning is just that: planning and executing your Will.
A Last Will and Testament, frequently shortened to Will, is a key piece of your estate plan. And there are two major reasons people don’t have a Will. Both boil down to difficulty in the planning process.
Reason # 1 – selecting guardians (or other choices)
A lot of people get stuck here. What happens to their children if they die? They can’t come up with an option they are okay with. So, they never choose anyone. Because they can’t make this choice, they don’t make any choices. And they never complete their Will. The same can be said about the distribution of assets and beneficiaries.
We understand the struggle. We have been in your shoes. But did you know that if you don’t lay out your wishes and you die without a Will, the Court will decide who your children will be raised by and where your assets will go? The Court will follow the law of your state of residence and distribute assets and guardianship rights as the law allows. In rare and unusual cases, this could mean your children could be placed in the foster care system.
Having an executed valid Will ensures that you, at the very least, know what will happen to your children if you die while they are minors.
Reason # 2 – not understanding the value of a Will
We touched on this above, but it’s important so we’ll say it again.
Without a valid Will at the time of your death, your estate (which is almost everything you own) will be distributed however the law of the state of your residence requires. Every state has different intestate inheritance laws, but for instance, in Georgia you have a spouse and 3 minor children, and you die without a Will. This may put your surviving spouse into a difficult spot because they do not inherit everything outright. They may inherit as little as 1/3 of the estate and have to put the remaining 2/3 into trust for the children— which doesn’t sound so bad in theory. But can be incredibly difficult in reality. If your intention was to leave everything to your spouse because you trust them to care for the children and ensure their well-being using the monies left behind, they have now been limited to a fraction of their financial potential.
Conversely, the intestate laws may also award someone you don’t prefer to receive an inheritance with an inheritance. Maybe this person has substance or gambling issues, or maybe this person is just someone you don’t prefer receiving anything from your estate. Without a Will, the Court will follow the law and distribute your assets as the law allows— regardless of your wishes.
So, having a valid Will matters. It matters a lot. Because it has the power to give someone all the resources they need to thrive, or it has the power to put safeguards on another’s resources. Ultimately, when you have a Will in place your wishes are clearly stated and can be followed.
Estate Planning
Estate planning is a much broader term. Think of it as a giant bucket or shed that catches every tool used to protect or distribute your estate.
Estate planning includes a Will but is so much broader than that.
Having a Will may be the most important part of estate planning but is not the only part. In fact, in most cases, it’s a great place to start but a bad place to stop. Because everyone’s estate is unique, their estate plan should be too. This is why talking to seasoned, knowledgeable professionals, like our team at Siedentopf Law, is so important. We will listen to you and provide you with a great roadmap for an excellent estate plan.
Your estate plan could include:
- Trust
- Last Will and Testament
- Standby Guardianship for while you are living
- Advance Directives for Healthcare
- Life Insurance and other Beneficiary Designations
- Appropriate property titling
- Power of Attorney
- And many other tools
We know that list is overwhelming. Estate planning is a lifelong process that should be reassessed and reviewed regularly. Having the help of a firm that focuses only on these issues brings peace of mind and excellent client service.
Call us at (404) 736-6066 or visit our website to schedule a consultation.
