Estate Planning Means More Than Just Drafting a Will

When some people hear the terms “estate plan,” “wills”, “trusts,” or “end-of-life planning,” their eyes glaze over. The subject of estate planning can be overwhelming because it is a multifaceted topic which covers many aspects of financial and healthcare planning, but also because it is often uncomfortable to talk about what will happen after you pass away. However, having an estate plan in place gives you control over the distribution of your assets, your legacy wishes, and could even help you pay less in taxes, fees, and court costs.

As an estate planning attorney, I have helped countless clients overcome their reservations and develop comprehensive plans that protect their families, both now and in the future. I am also aware that many people often have similar questions regarding the estate planning process. One of the most common involves the differences between a complete estate plan and a will.

Important Differences

A last will and testament is a document which designates how an individual’s assets will be distributed to heirs upon his or her death. A will can also appoint guardianship of children should a parent pass away while they still have young children. It is important to realize that a will is only part of a more comprehensive estate plan.

There are some assets and property that a will alone cannot address. For example, a will cannot include directives about joint tenancy property, property in a trust, life insurance proceeds that have a beneficiary, retirement plan proceeds, or proceeds from a payable-on-death bank account. A will is also not the appropriate place to document any wishes or instructions for one’s funeral and burial because often, a person’s estate is not settled until after the funeral has taken place. Finally, a will cannot be used to minimize estate taxes or avoid probate the way other estate planning tools can.

Powers of Attorney, Living Wills, and Trusts

In most cases, a comprehensive estate plan should include much more than just a will. Designating a power of attorney is a very important step in estate planning. If you ever become incapacitated by illness or injury and cannot make financial or health-related decisions on your own, a power of attorney allows you to select a person you trust to make them on your behalf.

A living will allows you to specify what your health care wishes are for your end-of-life care. For example, a living will is used to declare your desires regarding the life-prolonging measures you wish to be taken—or not taken—in the event of brain death or terminal illness. A living will is very important for those with families because it lessens the decision-making burden on them should you become terminally ill.

Trusts offer more options for those who wish to pass property and assets to individuals or organizations after they pass away. There are many benefits to using a trust, and there are different types of trusts that are designed to protect and distribute assets in different ways. For example, assets in a trust generally do not have to go through probate proceedings to pass to heirs which can save time and money. Also, trusts can be confidential because they are not publicized by the probate process the way wills are.

Contact a Member of Our Team Today

These are just a few of the tools that can be used in creating a comprehensive estate plan. To learn more about which instruments are right for your unique situation, contact one of our experienced Naperville estate planning lawyers. Call the Gierach Law Firm at 630-228-9413 for a confidential consultation today.

Sources:

Forbes

CNN Money