Many people believe that if they have a valid will they also have an estate plan. But, this is not the case. While a will outlines where the deceased individual’s assets will be distributed, it does not include various other documents and directives that are available. An estate plan can include a variety of documents and directives that when read in conjunction with a valid will, provides a more detailed plan upon the death of the creator. If you want to learn more about estate planning vs wills, read on or get in touch with our experienced wills and estate lawyers today.
Overview:
Difference between estate planning vs wills
What is a will?
A will is an important legal document that outlines how the estate and assets will be distributed, along with the wishes for their dependents. This will only come into effect once the creator of the will is deceased.
What is an estate plan?
Estate planning involves different and varied documents to make more specific health and financially related decisions. These can be relied upon if a person becomes incapacitated or upon their death.
Creating a will
Initially, for a valid will to be created the testator must be:
- Over the age of 18
- The will must be in writing
- The testator must have the mental competency to make decisions regarding the distribution of their assets
- The will must be signed by the testator and witnessed (note the number of witnesses is dependent upon local laws)
- The will does not need to be notarized or even drafted by a solicitor.
Contents of a will
The contents of the will are dependent upon the assets the testator has. For example, a will can distribute personal property, such as jewellery,mementos or art. A will can also legally distribute real property, such as homes and vehicles.
For some people, a will is enough to safely and securely distribute their assets upon their death. But, for most people a will is not a sufficient level of financial planning to secure the proper distribution of their estate. Hence the need for a comprehensive estate plan.
Creating an estate plan
Living will
While no one wants to think of themselves as being physically alive, yet unable to make their own medical and health related decisions, it is possible for this situation to arise. It is also possible to plan for such an occurrence by using a document called a living will. A living will allows the preparer to make decisions about the types of medical treatment they want (or do not want) to receive in the event that they are not consciously able to make these decisions for themselves.
What is included in a will?
A living will also allows for the preparer to designate someone they love and trust to carry out these decisions for them. Such a person is called a health care proxy. Via a living will, a number of decisions can be made and documented with regard to the will-maker’s ongoing medical treatment. These can include:
- The use of medications
- Food and water intake
- Resuscitation directions
- Organ donation
- Use and/or continuation of mechanical breathing measures such as a ventilator
Once you have drafted a living will and documented your preferences, you can then name a health care proxy to carry out these decisions for you.
Trusts
Estate planning also allows the preparer to choose among a variety of trusts that can be used to distribute assets using particular and specific directives. These can provide a range of additional benefits to both the testator and the beneficiary, including:
- Transfer of real property
- Distribution of assets using a metered time frame
- Tax benefits
- Asset protection
- Use of trustees
There are a variety of trust’s available to someone who wishes to use a trust document. As such, it is best to explain to your estate planning attorneyr your intentions and seek their expert advice as to which type of trust would best meet your needs.
Power of attorney
There are various types of power of attorney, including both revocable and irrevocable. The designation of a durable power of attorney can be very beneficial in protecting both the assets and the beneficiary. Though, again, because power of attorney can be put into place for a variety of needs and possible scenarios, it is best to explain to your solicitor what you want to accomplish and allow your solicitor to give you recommendations that meet your specific desires and needs.
While many people understand and prepare a last will and testament, many more have never had the opportunity to plan for their estate distribution beyond the aspects of using a will. If you are one of these people, it is highly recommended that you take the time to explore the use of other estate planning documents. These options can be explained to you by a solicitor who specialises in estate planning. We highly recommend that you reach out to your solicitor and assess the many available ways to use additional estate planning documents to your advantage.
Speak to the wills and estate lawyers at Owen Hodge today
Now that you know the difference between estate planning vs wills, you can make an informed decision about the best option to consider. If you find yourself in need of assistance with wills and estate planning please contact our experienced wills and estate law team.. At Owen Hodge, we are always happy to assist clients in understanding the full ramifications of any and all of your legal needs. If you have further questions, visit our wills and estate planning FAQ page, or feel free to call us at your earliest convenience to schedule a consultation at 1800 770 780.
Estate planning vs wills: FAQs
Does a will need to be registered in Australia?
Wills in Australia do not need to be registered or lodged with any type of authoritative figure. Just make sure to tell your executor of the will and your family members where the will has been stored.
How much does estate planning cost?
Your estate planning costs will all depend on the law firm you use. Plus, it also depends on what sort of estate planning documents the client might need and how complex these documents could be.
Learn more: Cost of Making a Will
What is the difference between a will and a trust?
A trust is a document that can be drawn up to manage and distribute your assets whilst you are alive. A will is a document that manages and distributes your estate when you have passed away.