15 Aug Wills vs Estate Plans
At Phelps LaClair in Gilbert, Chandler and Mesa, we often get questions like: “What is the difference between wills and estate plans?” We know from 40 years of experience that wills cannot encompass all the complexities of end-of-life issues. If you have any property at all, you will need an estate plan, and estate planning is all we do! So, what do estate plans include?
Wills vs. trusts
One of the key elements in an estate plan is a trust. Wills are typically written to decide who gets your stuff when you die. A trust is similar, but it can include provisions of protection that wills cannot. Wills must be processed in probate court; trusts do not need to be. A trust will significantly reduce the possibility of family squabbles that are all too often the case with wills.
A trust will specify who gets your stuff, and it will also name a successor trustee who will see that the terms of the trust are carried out, including the disposition of your assets. A well written trust will spell out your desires for your children: who will take care of them, when and how they will receive their share of the inheritance, and any other instructions that will protect their inheritance from fraud, lawsuits, and divorce.
An estate plan will include a statement of your desires for medical care in the event you become incapacitated. Instruments such as a Living Will and a health care power of attorney are essential elements in an estate plan. These documents will state your desires for long term medical care and end of life issues. They will name a power of attorney to make decisions for you when you cannot do it yourself. Wills deal only with the dead, not the living.
Financial power of attorney
Every good estate plan will include a financial power of attorney. Like a health care power of attorney, a financial power of attorney names a trustee to make financial decisions for you when you are unable to do so. The trustee can oversee your bank and investment accounts, and your spending. They have the authority to make the necessary adjustments as your financial picture changes.
Disposition of assets
An estate plan includes provisions for the distribution of your property when you pass on. It may be through a trust as mentioned above, but it may also account for the disposition of specific property for sentimental or personal reasons. The estate plan will often name beneficiaries for insurance and retirement accounts. When these are included in a trust, it avoids the need for probate court with its attendant costs and delays.
An estate plan trust can include your wishes for what happens to your body when you die. The instructions can be carried out immediately, unlike a will that needs to be scheduled for probate.
Now that you understand the difference between wills and estate plans, you can see why an estate planning lawyer is necessary! Phelps LaClair has helped thousands of people like you execute a great estate plan. If this is your first meeting with us, come in for a free consultation where we can discuss your estate planning needs and desires. 40 years of experience is waiting to serve you!