Estate planning and will writing may often be used interchangeably when talking about planning for retirement or for what will happen to your assets once you pass away. However, there is a key difference. Estate planning is a far broader and more complex process, of which writing a will is only one part.
A will focuses specifically on the distribution of assets following death, and possibly also on the care of minors. While this forms an essential part of an estate plan, there is a lot more to it than that. An estate plan can also apply during your lifetime and may look at areas such as mandate in case of incapacity, philanthropy and healthcare.
Dr Edgar Paltzer works with families to establish estate plans as part of his attorney-at-law practice.
Writing a Will
A will, or last will and testament to give it its full name, is a legal document that details where and how your assets will be distributed when you die. It can also include information about who will care for any dependents and who you would like to execute your will, meaning who will be in charge of making sure your wishes are carried out.
A will has clearly defined terms and helps to reduce the risk of family conflict after you pass. If you should die without having written a last will and testament, you are declared to have died ‘intestate’, which means the courts will decide how to divide your assets.
Creating an Estate Plan
Writing a will forms a major part of creating an estate plan, but there are several other aspects that are usually included. Estate planning can focus on eventualities before death, such as what would happen if you were to become mentally or physically incapacitated. This is called mandate in case of incapacity, and there are three main types of this.
Continuing mandate in case of incapacity defines who you want to make financial decisions for you. Welfare mandate in case of incapacity identifies who you would like to make medical decisions on your behalf if you are unable to do so. Combined mandate in case of incapacity, as the name suggests, gives the same person the right to make both financial and medical decisions for you.
An estate plan may also cover your plans for the management of trusts for beneficiaries of your will, as well as business succession planning if you run or own a family business.