Thank you for joining us for Episode 31 of our Money Wisdom Question Series, where we answer common financial and retirement investment questions. Today’s question is, “What is the difference between a will and a full estate plan?”

What is a Will?

A will is simple. It tells where you want your possessions to go when you die. This includes anything that’s not covered by beneficiary designation (Life Insurance policies and retirement plans). For example – cars, houses, brokerage accounts, other investments, and maybe even land.

You may or may not have a will. Everybody should have a will. If you do not have one, the state you live in has written a will. They have laws and statutes that dictate where your money and possessions go when you die if you don’t have your own. So, I think it’s really important that everybody has a will prepared.

What is an Estate Plan?

An estate plan is much more comprehensive than that. I can set up trusts in my estate plan that allow me to leave money to my kids or grandkids, all while making sure certain rules are followed. With a trust, I can have control over the way that money is spent, even after I pass away. I don’t want my kids to have a BMW in the parking lot before the dirt is even on my grave!

You can also protect assets with an estate plan. If I end up going into a nursing home, I don’t want all of my money spent down to take care of me. I want some of it preserved for my kids and for my grandkids. A good estate plan will protect some of that savings and some of those assets.

In addition, I can set up an estate plan that gives clear instructions if I’m still alive, but can’t make financial decisions for myself or manage my affairs. This allows me to have certain stipulations in place and I can appoint somebody to manage those affairs for me. I can also say, “don’t keep me alive if I’m on a machine”. All of these things are part of a comprehensive estate plan.

Professional Estate Planning Help

In this day and age, I would suggest that you need a full estate plan and not just a will. Have a full estate plan created by a professional who does it all the time. Not just somebody who does real estate closings and tells you that they can do an estate plan. Find someone who really specializes in estate planning, whether it’s a fiduciary financial planner or an attorney who does it for a living. The reason behind this is because an estate plan is much more complicated than just having a will.

Thanks for joining me and I hope you found this information helpful!

P.S. If you enjoyed this topic and want to learn more, download our offer, “The Greatest Gift: Outline Your Wishes with an Estate Plan“.

P.P.S. Feel free to submit questions here for a chance to have them answered!