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Estate planning is the process of arranging, during a person’s life, for the management and transfer of their assets in anticipation of their incapacitation or death. It is a comprehensive strategy that goes beyond just drafting a will. A proper estate plan is designed to preserve the maximum amount of wealth possible for the intended beneficiaries and to provide clear instructions for carrying out the individual’s wishes, all while minimizing potential taxes and legal expenses.

Estate planning is important because it gives you control over the disposition of your property. Without a plan, the distribution of your assets after death will be determined by the default inheritance laws of the state, which may not align with your wishes. A well-crafted estate plan can also help minimize potential estate taxes, protect your assets from creditors, and spare your family the time, expense, and public nature of a court-supervised probate proceeding.

Virtually every adult who owns property, regardless of its value, or has dependents needs an estate plan. It is a common misconception that estate planning is only for the wealthy. Any individual who wants to control how their assets are distributed, provide for their loved ones, name a guardian for minor children, or specify their wishes for end-of-life medical care should have a legally sound estate plan in place to ensure their intentions are honored.

The main difference lies in how and when they function. A will is a legal document that only takes effect after your death and must go through the public court process of probate to be validated and executed. A living trust is a legal entity that is created and holds assets during your lifetime. Upon your death, the assets held in the trust can be transferred to your beneficiaries privately and efficiently, without the need for court intervention through the probate process.