The Informed Investor
What is the Difference Between Estate Planning and a Will?
May 25, 2022
In Nevada, a last will and testament is an important component, and arguably the foundation of your overall estate plan. However, a will should never be considered sufficient in and of itself, particularly for high-net-worth individuals. On the contrary, a will should be considered the bare minimum, when it comes to estate planning. Here is a look at some of the key differences between estate planning and a will.
What is a Will?
A will is a legal document that makes clear your wishes for the distribution of your property after your death. The recipients of your assets are known as beneficiaries. If you have minor children you can also name the individual(s) you wish to care for your children.
It can be helpful to think of a will as instructions. However, it is just one of many documents that may be included in a sound estate plan. A will alone may not prevent your beneficiaries from going through probate. Although you name an executor in your will, the probate court of Nevada may oversee the disbursement of assets. Probate in Nevada could take more than 12 months to complete.
If you die having left a will, but no other estate plans in place, your beneficiaries may be subjected to ongoing red tape, high costs, and substantial delays in receiving the assets you want them to receive. Moreover, your will is entered into the public record.
What is Included in Comprehensive Estate Planning?
Estate planning is a comprehensive strategy for preserving and passing wealth on to your loved ones or designated charities. Estate planning also offers privacy. Unlike a will, which only takes effect after your death, an estate plan can name individuals to specific roles, if you become incapacitated due to illness, disease, or injury.
Therefore, in addition to a last will and testament, a comprehensive estate plan should contain other critical legal documents such as:
- Living Trust
A living trust can prevent your beneficiaries from being subjected to probate. A living trust, also known as a revocable trust allows for the legal transfer of assets from person to person as outlined in the document. A living trust can be modified at any time while you’re alive. It also allows you to retain complete control of your assets, until your death, upon which they will be distributed to your beneficiaries.
- Financial Power of Attorney
As part of your estate planning, you can name the individual that you wish to manage your financial affairs, such as paying bills, collecting benefits, and more should you become incapacitated due to physical illness, injury, or mental/cognitive decline.
- Healthcare Power of Attorney
Your estate plan can include a health care power of attorney. This names an individual who will be responsible for making medical decisions on your behalf if you are unable to make these decisions. These decisions can include surgeries, treatments, and end-of-life care.
- Advance Directive
In Nevada, an advance directive states your wishes in regard to the medical treatment you do or do not wish to receive. This can prevent unwanted, prolonged treatments such as artificial nutrition or respiration if you are diagnosed with an irreversible and incurable illness.
- Beneficiary Designations
Investment accounts, retirement accounts, IRAs, annuities, pensions, and other accounts usually include the individuals who are to receive the funds from the accounts. You may designate certain percentages to certain individuals. Your beneficiary designations can all be listed as part of your overall estate plan
Depending upon your unique circumstances, you may want to include other documents in your estate plan such as:
- Inventory of assets
- Proof of joint ownership of real estate, vehicles, etc.
- Titles and property deeds
- Proof of identity (birth certificates, death certificates, marriage licenses, divorce decrees, etc).
- Insurance policy paperwork
- Digital asset inventory
These are some of the important documents that you can include in your estate plan. An estate planning attorney, along with your accountant, and financial advisor can help you ensure that you have not overlooked any critical documents so that your estate can be distributed in keeping with your explicit wishes.
Strategic Estate Planning for High-Net-Worth Individuals in Nevada
At the Investment Counsel Company (ICC), our financial advisors can work in collaboration with your other advisors including your estate planning attorney and accountant. If you have $1,000,000 or more in investable assets contact us today to learn more about our services at 702-871-8510.
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