While you probably know you need a will (and may already have one), you might also have read about other estate planning options, such as trusts, powers of attorney, and advance directives. But what exactly is the difference between a will and an estate plan? A will represents a foundational component of a comprehensive estate plan, which can address numerous matters during and after one’s life. An experienced estate planning attorney from Surprenant & Beneski, P.C. can help you determine which estate planning tools and strategies best serve your needs and goals for your family’s future.
What Is a Will?
A will is a legal document through which an individual can direct the disposition of their estate’s assets after death. A will can serve three primary purposes:
- Nominating executors: A person can appoint one or more people to serve as the executor or substitute executor of their estate.
- Directing distribution of assets to beneficiaries: An individual can direct the distribution of their estate assets to one or more beneficiaries in their will. Individuals may distribute percentages of the net value of their estate (after satisfaction of debts, expenses, and taxes) to beneficiaries or identify specific assets that a beneficiary should inherit, such as a home, vehicle, or heirloom.
- Nominating guardians for minor children: When minor children lose both of their parents, their parents’ wills can nominate individuals or couples to become guardians for their children (subject to the court’s approval of the parents’ choice as in their child’s best interests).
Although wills serve as the cornerstone of an estate plan, they have limitations that other aspects of estate planning can address. For example, a will only goes into effect after the person’s death, meaning that other estate planning tools must address the management of their assets and affairs during their life. Wills also do not address other aspects frequently covered by comprehensive estate plans, such as future incapacity or tax planning.
Understanding Estate Planning
Estate planning involves developing a comprehensive strategy to manage one’s assets and affairs during life and after death. A thorough estate plan may utilize various tools to address a person’s needs, concerns, and objectives. Examples of commonly used estate planning strategies include:
- Wills: A will usually forms the basis of an estate plan by appointing one or more people to administer a decedent’s estate after their passing by settling the decedent’s outstanding liabilities and distributing any assets remaining in the decedent’s estate.
- Trusts: Many individuals and families use trusts in comprehensive estate planning strategies to obtain various benefits, including minimizing estate tax liabilities, avoiding the cost of probate when distributing assets to heirs/beneficiaries, organizing charitable giving, and qualifying for government health benefits like Medicaid.
- Powers of attorney: A durable power of attorney empowers a trusted family member, friend, or professional advisor to handle legal and financial decisions for an individual if they should become incapacitated.
- Advance directives: Individuals can use advance directives to designate healthcare proxies to make medical decisions for them if they become incapacitated and to communicate healthcare and end-of-life care preferences to their proxies, family members, and healthcare providers.
- Beneficiary designations: With assets like bank/brokerage accounts, pensions/annuities, or life insurance policies, individuals can execute beneficiary or pay/transfer-on-death designations to pay out money from the asset or transfer ownership of the asset to heirs/beneficiaries.
Differences Between a Will and Estate Planning
Some of the most important differences between a will and comprehensive estate planning include:
- Scope: Wills only cover estate asset distribution after death and nomination of guardians for one’s minor children. A comprehensive estate plan can cover a broader range of subjects, including managing assets during life, tax planning, and legal/financial/medical decision-making.
- Mandatory probate: Assets passed via a will must go through probate, a court-managed process that oversees the administration of a decedent’s estate. Alternatively, estate planning tools may allow individuals to pass assets after death without the need for potentially costly and time-consuming probate.
- Lack of incapacity planning: Wills do not address who should handle one’s legal, financial, and medical affairs should they become incapacitated due to injury, illness, or advanced age. Comprehensive estate plans can incorporate tools such as powers of attorney and advance directives.
Do You Need More Than a Will?
Comprehensive estate planning can benefit individuals and families from all backgrounds, not just the wealthy. You may need more than a will if you have needs or concerns, such as:
- You have a family member with special needs that you want to protect and provide for after your passing
- You or your family own high-value or complex assets, such as a business or income real estate
- You worry about who will make decisions on your behalf if you suddenly become incapacitated
- You anticipate needing long-term care during your final years
What Happens If You Pass Without a Will?
When a person dies without a will in Massachusetts, the court can appoint someone to administer the person’s estate to distribute estate assets per the Commonwealth’s intestacy laws. Intestate succession distributes a decedent’s assets to their nearest surviving family members – usually, the decedent’s spouse and children. Passing without a will means you do not get to decide who inherits your estate, making estate planning critical to ensuring you leave behind a legacy according to your preferences.
When to Consider Estate Planning
People can undertake estate planning at numerous stages of life. Individuals starting a family may create an estate plan to protect their spouse and young children. People may develop comprehensive estate plans to manage substantial or complex assets they’ve acquired, such as business interests or high-value property. As they age, people may also undertake estate planning to empower trusted loved ones to help them manage their affairs and secure financial assistance for long-term care.
Contact an Estate Planning Lawyer Today
Are you interested in creating a will or exploring other estate planning strategies? If so, a lawyer from Surprenant & Beneski, P.C. can provide the guidance and assistance you need to protect your and your loved one’s interests and future. Contact us today for an initial consultation with an experienced estate planning attorney to discuss the suitability of various planning options for your circumstances, needs, and wishes.
