A will is a legal document that covers what will happen to your family and assets after your death. An estate plan, on the other hand, is a collection of legal documents that protect your family and assets while you are alive but incapacitated. It includes a will, a trust, an advance directive, and several types of power of attorney. An estate plan can also address other estate planning issues that cannot be included in a will.
A living will is a document that you complete that explains your health care decisions at the end of life in advance. It differs from Durable Powers of Attorney (POA) in that a POA is the person you name who can make medical decisions on your behalf. A revocable living trust is the trust most commonly used for estate planning, as it allows you to maintain control over the trust and make changes during your life. The first step in creating an effective estate plan involves having a basic understanding of the differences between all the tools and vehicles you can use.
If you're looking for an affordable option that includes helpful customer service, many online estate planning services can help you simplify the processes of creating wills and trusts. An estate plan ensures that the right people can take care of you in case you become incapacitated and can keep your things in case you die. An active trust is a legal agreement that allows you to transfer ownership of your assets to a trust account for various financial purposes, including estate planning. Unless you have a complex estate (several homes, a large savings account), a will is probably the easiest and most affordable way to plan for your death.
To leave your heirs and loved ones in the best possible position after your death, you'll want to create a comprehensive estate plan so that your assets can end up where you want them to. This means that what may be true for an inheritance in one state, may not be true for an inheritance in another state. Drafting a will and an active trust is an important step in estate planning, as it ensures that your assets are distributed according to your wishes and can help avoid disputes between family members or other beneficiaries. Living wills and estate plans are two important tools for ensuring that your wishes are carried out after you pass away or become incapacitated.
A will is a good starting point, but an estate plan provides more comprehensive coverage for your family and assets. It's important to understand the differences between these two documents so that you can make an informed decision about which one is right for you. When creating an estate plan, it's important to consult with an attorney who specializes in estate planning to determine if creating an irrevocable trust is best for you. Additionally, it's important to understand state laws regarding wills and trusts so that you can ensure that your wishes are carried out according to the law.
