It’s unlikely that you’ve never heard of a will before. In fact, “will” is a term you’ve probably heard all your life. But how familiar are you really with what it is?
“Estate planning” is probably a term you are less familiar with, at least when compared to a will. You might be thinking, “Wait, aren’t those basically the same thing?”
We’re here today to tell you that they are not. But worry not, because we’re also here to help you understand why!
What is a will?
Let’s start off with a basic outline of a will. You probably already know that will is a legal document where you designate who will inherit your assets after your death.
Essentially, wills are useful for people who have assets that will need to be passed on and who want to make sure their wishes are respected in terms of inheritance.
What is an estate plan?
An estate plan is not the same as a will. Estate plans are essentially a combination of wills and other legal documents and can be created with the help of an expert on will and estate law in Miami. Estate plans can include a will, but they will often include other types of documents, which we will outline below:
Power of attorney
A power of attorney is a document that will give someone you trust the authority to handle your affairs. This will include property management, financial transactions, and healthcare decisions.
Having a will is typically not enough to fulfill a power of attorney. That’s because a will can often be disputed by other loved ones.
Beneficiary designations
Beneficiary designations dictate who will receive money from your retirement accounts after you die. A will, on the other hand, focuses on assets like property and finances.
It is a good idea to pair beneficiary designations with a will so that you can make sure that all of your assets will go to the proper people. This will especially come in handy if you have more than one retirement account or investment, or if you have a spouse or children who will receive assets once you die.
Living wills
You may not know that there is actually more than one type of will. The two types of wills are the “last will and testament” and the “living will.” The last will and testament is the standard will, while the living will outline what will happen to you if you become incapacitated, such as medical treatments.
This living will can be included as a part of your estate plan.
Guardianship creation
If you have children, then you will most likely want to create a guardianship plan. This will outline who will take care of your children in the event something happens to you. This will also provide basic information about your children’s education and wellbeing.
Business successions
If you own a business, then you will want to make sure that the people you want will take over after your death. This will allow you to feel more comfortable knowing that your business will be in capable hands.
A will does not provide the same level of protection that documents in estate plans do in regard to business succession.
Gifts and charitable donations
An estate plan can also outline any gifts or charity that you wish to disperse after you have passed on. You can do this by choosing a charity and naming it as a beneficiary of a revocable trust or by leaving retirement assets to a charity. Either way, this information will be included in your estate plan.
Conclusion
You might notice that estate planning and wills are both methods of preparing for what will happen to your assets after you pass away. You could even say that wills are a subcategory of estate planning!
Because of this, you should get in touch with an expert on will and estate law in Miami. Don’t wait until it’s too late to get everything in order. Contact the law office of Luis E. Barreto & Associates, P.A. today for help with will and estate planning.
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