When drawing up a will, or working on the entire estate planning process, understanding the difference between various documents is important because each serves a unique purpose. The one constant is that everyone should have some sort of estate planning, no matter how much is left behind. To ensure no errors are made, consult an experienced estate lawyer to ensure everything is legally binding.
Why Plan The Estate
In order to get it right, the first thing to understand is the need to plan the estate in the first place. While there may not be a lot to leave loved ones, a few things are important to them and so you want to ensure they get everything. Without a will, the state and federal governments can step in and decide who gets what, and that’s something nobody wants to happen. What you’ve worked so hard for all these years and the few things that really matter should go to loved ones.
“If you don’t plan your estate, the government will do it for you! Don’t let that happen.”
What Kind of Documents Need To Be Drawn Up?
Everyone knows that a will refers to a document called a ‘Last Will and Testament’ where who gets what and how much is specified. However, other documents might include:
- Revocable Living Trust
- Living Will
- Power of Attorney – Financial
- Power of Attorney – Medical
And there are other documents your lawyer can discuss with you. The point is, everyone gets sick at some point in their lives and everyone dies. As the old saying goes, “There are only two things that must be done in this life, pay taxes and die.” Unfortunately, at death, if the estate was not planned well, those taxes paid from the estate might have gone to a beneficiary if the right instructions or other legal provisions were documented.
The Difference Between Executors and Beneficiaries
These are two terms many people get confused. While they can, and often do, refer to the same person, they aren’t the same thing by definition. An executor makes sure the deceased’s wishes are carried out and a beneficiary is the person or persons who receive what was left to them in the will. In other words, the executor is trusted to hand out assets as set forth in the will and the beneficiary is who received those assets. It’s simple enough, or at least it should be, once the role of each person is understood.
Planning an estate may not be something most people want to think about, but it is important to do it and get it right. Whether leaving behind $20 or $20 million, that money or assets should go where you want them to go. When in doubt, consult with an estate attorney who can give legal advice found nowhere else.