What’s the Difference Between Estate Planning and Wills?

If you google ‘estate planning’, you’ll get various answers. According to Investopedia  “Estate planning involves determining how an individual’s assets will be preserved, managed, and distributed after death or in the event they become incapacitated.”

Will planning can be a relatively simple process that involves creating a last will and testament.

In essence, Will planning forms part of your estate plan.

Here’s a question.  Whilst alive, and fully compos mentis, would you give control over all your assets to others?

If you are not prepared to transfer power and control to your beneficiaries whilst living, what will make them any more competent the day you die?

Many families are not prepared for this process.

Most of the discussions about succession and estate planning all focus on money.  In essence, a Will directs who gets your assets.  However, our approach to estate planning is more about power and control.

When living, you have power and control over your assets.  If you are deceased, somebody else has power and control over whatever assets you have distributed to them.

Whilst the law will protect minors, there is no protection for adults. It means a beneficiary can do whatever they want with the gifts on death.  It is why the old saying “clogs to clogs in three generations” still holds true.

Even if you have made a Will, it is vital to design and build an estate plan. Whilst an estate plan can encompass the use of trusts, they can be useful in the right circumstances, but not always.  Too often we see trusts used in Inheritance Tax planning, but they fail to be appropriate in the estate planning process.  What is the point of saving 40% inheritance tax if your beneficiaries spend 100%? It is not about controlling money for future generations; it’s more about empowering beneficiaries to make great decisions.  Remember, you may have had the talent to build wealth, but your beneficiaries may not.  Yet, it’s not talent you need to hold onto wealth, it’s brains.  It needs thinking and rethinking.

This is where we can help.

We act in conjunction with your Lawyers, by helping you create an estate planning and succession structure.

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