Persons interested in writing a will might come across the words “estate planning.” Some may wonder what the difference is between the two, which is understandable. Using the terms interchangeably might be the reason for the confusion, and Oregon estate administration law covers more than writing a will.
Writing a will vs. estate planning
Writing a will is often part of estate planning, but developing an estate plan could involve many additional steps beyond the purposes intended for a will. With a last will and testament, testators set forth how they want their assets distributed and to whom. A will might deal with other matters, such as the guardianship of a minor.
As a legal contract, a will has limitations. Also, the document would not be appropriate in other situations since it only involves matters related to a deceased person.
However, a durable financial power of attorney helps someone who is still alive and wishes to grant attorney-in-fact powers to an agent. Someone who wishes to leave financial and other management responsibilities to a personal representative may explore this option. And yes, granting POA authority falls under the umbrella of estate planning.
Additional aspects of estate planning
The estate planning process may involve thinking a situation through and coming up with the appropriate approach. Perhaps a trust could be preferable to a will since a trust avoids probate and provides the grantor with more authority.
Looking over transfer on death (TOD) options might be another aspect of estate planning worth considering. TOD transfers allow financial accounts to move to a beneficiary without probate.
Third parties could make health-related decisions for someone if there’s a health care proxy. A testator may write a living will to pre-establish health care decisions before becoming incapacitated.