Estate planning and drafting a will are two processes that go often hand in hand, but many people don't know the difference between the two or think they're interchangeable—which they're definitely not.
An estate plan is a comprehensive plan that includes documents that are effective during your lifetime as well as other documents that aren’t in effect until your death. Together these documents contemplate who has the power to make healthcare and financial decisions on your behalf during your life, and who receives your assets at death.
Having a lawyer draft your will is an important piece of the estate planning process, but there are several other important documents. A will details where you want your assets to go at your death, and who you would like to serve as guardian of your minor children. A will also names an executor who is in charge of distributing your assets to the right people or charities.
The other documents that comprise an estate plan include:
- Durable power of attorney, which allows an agent to handle your finances
- Healthcare power of attorney, which allows a named agent to make medical decisions on your behalf if you are incapacitated
- Advanced directive, which details your decision about life-prolonging treatment.
These documents combine to form a comprehensive estate plan that can provide you with peace of mind and lessen the burden on your loved ones during difficult times.