You Have a Will. Do You Still Need an Estate Plan?

Creating a will is an important step in preparing for the future. It allows you to explain how you want certain assets distributed and can provide guidance for your loved ones after your death. However, having a will does not necessarily mean your estate planning is complete. An estate plan is broader than a will. Depending on your circumstances, it may include several legal documents and financial strategies designed to address what happens to your property, finances, healthcare, and other important matters during your lifetime and after your death.

A Will Only Addresses Certain Issues

A will primarily provides instructions for distributing assets after death. It can also nominate guardians for minor children, depending on applicable state law and circumstances.

However, a will generally does not control every asset you own. Certain assets may pass outside the will through beneficiary designations, joint ownership, or other arrangements. This is one reason simply having a will may not be enough to ensure your overall plan works as intended.

Reviewing how your assets are titled and how beneficiary designations are structured can be just as important as having a properly prepared will.

Estate Planning Can Address Incapacity

One of the biggest differences between a will and a broader estate plan is what happens while you are alive.

A will generally becomes effective after death. It does not give someone authority to manage your finances or make healthcare decisions if you become unable to do so.

Depending on your needs, an estate plan may include documents such as a durable power of attorney and advance healthcare directive. These documents can identify people you trust to handle financial or healthcare decisions if you cannot make them yourself.

A Trust May Be Appropriate

Some people may benefit from establishing a trust as part of their estate plan. A trust can provide instructions for managing and distributing certain assets and may offer greater control over when and how beneficiaries receive property.

Trusts are not necessary for everyone, and the appropriate structure depends on factors such as your assets, family situation, goals, and applicable laws. A qualified estate-planning professional can help determine whether a trust makes sense for you.

Your Beneficiary Designations Matter

Retirement accounts, life insurance policies, and certain financial accounts may transfer according to beneficiary designations rather than the instructions in your will.

This means your estate plan should be coordinated. A will may say one thing while an outdated beneficiary designation says another.

Review these designations periodically, particularly after major life changes such as marriage, divorce, the birth of a child, or the death of a beneficiary.

Read more: Navigating Beneficiary Designations: Common Mistakes and How to Avoid Them

Estate Plans Need Regular Updates

An estate plan should not necessarily be created once and forgotten. Your finances, family relationships, property ownership, and personal wishes can change over time.

Review your documents periodically to make sure they still reflect your current circumstances. Major life events may require updates to your will, trust, beneficiary designations, powers of attorney, or healthcare documents.

Read more: Big Life Events That Should Prompt an Estate Plan Review

Final Thoughts

Having a will is a valuable part of estate planning, but it may only address one piece of a much larger picture. A comprehensive estate plan can help address property distribution, incapacity, healthcare decisions, beneficiary designations, and other concerns.

If you already have a will, consider reviewing the rest of your plan to determine whether it still matches your wishes and circumstances. Because estate-planning laws vary by state, working with a qualified estate-planning attorney can help you understand which documents and strategies may be appropriate for your situation.

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