Let’s take a look at the key differences between these two important documents.
While it’s never pleasant to think about, planning for what happens to loved ones or assets after we pass away is extremely important. Having a Will and a comprehensive Estate Plan in place can help circumstances to run smoother in the event of your death or incapacity. But what is the difference between the two and which is right for you?
What is a Will?
A Will is a legal document that sets out who you want to inherit your estate in the event of your death.
It could include things like who you want to take care of your children, inherit certain property or other assets and run your business. It can also set out who you want to be in charge of distributing your estate, otherwise known as the executor.
It is often advised to review (and if necessary, update) your Will every five years.[1] It may be prudent to do this sooner if there is a significant life event, such as the birth of a grandchild or a marriage within the family.
Do I need a Will?
A Will is often essential if you want to see your estate distributed in a certain way. Without one, your assets may be dealt out in a way that you may not want.
If produced correctly, a Will should be legally binding (although there is always the possibility of a contestation) and is an important part of the process to ensure your wishes are met after you die. Therefore, if you have an idea of how you want your assets distributed or dependants cared for then making a Will may be a priority for you.
What is Estate Planning?
Simply speaking, Estate Plans are much more comprehensive when it comes to setting out what will happen to your assets after you die. They usually contain a Will but there are several other areas that may also be included.
These may be details of a Power of Attorney to make decisions on your behalf should you become incapacitated. As well as this, it can also include business continuity plans if you are a business owner and information about any trusts that you have arranged for loved ones.
A trust can be set up in order to manage money or assets on behalf of your beneficiaries. You may set up a trust to dictate how much and at what point a beneficiary receives an inheritance from you.[2] This can be useful in the case of minors or for other personal reasons.
There are many types of trusts; it may be a good idea to speak to a specialist who can assist in this area.
Which is right for me?
If your assets and wishes are reasonably simple, a Will may be enough for you. But for more complicated situations, a full Estate Plan may be necessary. You may wish to speak to a professional who specialises in Wills and Estate Planning who can help determine the right path for you.
Here at Brunsdon Financial, we understand how important it is to our clients to give their families a secure future. While it may seem a daunting prospect, our Estate Planning Advisers are on-hand to guide you at every stage in the process of Will writing and Estate Planning and support you through some of life’s most important decisions.
