Estate Planning vs Wills: Understanding the Key Differences

There can be confusion surrounding the distinction between estate plans vs wills. Below, we get into the finer details of what makes these important life-planning tools different from one another.

Will vs Estate Planning: The Basics

While many use “will” and “estate plan” interchangeably, they are actually distinct legal tools with different scopes and purposes. A will is a crucial component of estate planning, but an estate plan encompasses much more than just a will.

What Is the Difference Between an Estate Plan and a Will?

A will is a singular legal document that outlines your wishes for asset distribution after death. It names beneficiaries for your property and can designate guardians for minor children. However, a will only takes effect after you pass away, unless you’ve also outlined a living will.

Estate planning is more comprehensive than a will. An estate plan is a collection of legal documents that includes a will but also addresses your needs while you’re alive. It covers scenarios such as incapacitation or serious illness. A comprehensive estate plan ensures your wishes and your family’s best interests are respected throughout your lifetime and beyond.

Components of a Robust Estate Plan

When comparing an estate plan vs a will, it’s essential to understand what an estate plan encompasses. Every person’s needs are different, but the average estate plan will include:

• Will: The foundation of your estate plan. Your will outlines your wishes regarding the distribution of your property and other assets following your passing.
• Living Trust: A living trust enables you to set aside wealth while retaining access and control. When set up and funded correctly, a trust can avoid the probate process and protect assets from creditors. A living trust also helps to keep proceedings private, unlike a will which is a matter of public record.
• Healthcare Directive: An estate plan can outline your healthcare preferences. For example, if you become terminally ill, your estate plan can include a medical power of attorney (POA). A medical POA will name the individual you’ve entrusted to make medical decisions on your behalf if you’re ever unable to do so.
• Durable Power of Attorney: This legal document appoints someone to handle legal and financial matters if you become incapacitated.
• Guardianship Designations: You can name caregivers for minor children or dependent adults in an estate plan.

Other Differences

• Scope: A will primarily deals with asset distribution after death, while estate planning covers both life and death scenarios.
• Timing: Wills only take effect posthumously, whereas certain estate planning documents are active during your lifetime.
• Flexibility: Estate plans can be adjusted more easily to accommodate life changes.
• Privacy: Wills become public record, while many facets of estate plans do not and allow you to maintain privacy.
• Tax Planning: Comprehensive estate planning often includes strategies for minimizing tax burdens.

Why Estate Planning Matters for Everyone

Even if you don’t have children or significant assets, estate planning remains crucial. It ensures your medical wishes are respected if you’re incapacitated and provides a framework for managing your affairs in many scenarios.

For same-sex couples in Chicago, estate planning has additional value and importance. Despite much progress, unique challenges can arise for members of the LGBTQ community when it comes to legal matters. For example, there may be disputes regarding custody over non-biological children when a biological parent passes away. Or, family members can try to interfere with a spouse’s ability to make medical or financial decisions for their partner.

A comprehensive estate plan is essential for protecting your rights and wishes. At Metz & Jones LLC, we are highly skilled at crafting tailored estate plans that address the specific needs of same-sex couples. Our experience ensures that your legacy, healthcare decisions, and financial matters are managed according to your preferences. We can help you gain peace of mind for yourself and your loved ones.

Don’t leave your future to chance— Contact Metz & Jones LLC today to begin the estate planning process and secure your legacy.