Not everyone realises that estate planning and wills are not the same things. While your intention can be the same, there can be much more involved in estate planning as a whole, rather than simply putting together a will.
If you’re unsure what’s involved in either estate planning or will creation, the following information may prove helpful.
What is an Estate Plan?
An estate plan involves creating a plan for your assets and any investments when you die. It ensures your loved ones are provided for while also making sure your assets make it to the people you wished to benefit from them.
Estate plans incorporate the making of a will, your superannuation death nomination, power of guardianship, power of attorney, testamentary trusts, and medical treatment wishes if you’re no longer able to communicate.
While having an estate plan in Australia is not a legal requirement, it can be a worthwhile plan to make sure your family and friends are well cared for in the event of your passing.
How Do You Create an Estate Plan?
Many people are put off by the idea of creating an estate plan because it looks like a lot of hard work. However, wills and estates experts are making it much easier than ever before. To the point where some of the process is easy to do online.
You can start your estate planning journey by taking stock of all your assets. Write down all the personal assets you have, and don’t forget to include any life insurance policies, trusts, and superannuation.
It’s also worth looking at any risks to plan around, like divorce or mental incapacity. Finally, you can work with an estate planner, accountant, or lawyer, to produce an estate plan that takes all your assets into account and makes sure your wishes are considered.
What is a Will?
Within an estate plan is a will, which is a legal document outlining where you want your assets to go once you die. The more precise your will, the more helpful it can be for your loved ones left behind.
A will can outline your preferences for a funeral, where your assets are to go, who will look after your children, whether you’d like some money to go to charity, and whether you’d like specific assets to go to specific people.
If you die without a will, or at least without a valid one, this is considered ‘dying interstate’. Assets are distributed according to the laws of the state you’re in, but typically to your family members.
Why Create a Will and Estate Plan?
You might not be concerned about what happens to your possessions when you die, but there’s certainly value in planning for what will one day come.
A will can offer much-needed peace of mind that your assets go to the right people. They also make sure the people you care about have financial support and that disputes are kept to a minimum. Estate planning is also about much more than money. You can make decisions about your healthcare in the event that you’re not able to communicate and that your dependents are taken care of based on your wishes.
It’s easy to let estate planning fall by the wayside and leave it for another day, but it’s more important than you might think to focus on this task soon. Start by writing down your assets and begin talking to planning experts about putting your wishes into writing.