For many Arkansans, estate planning provides an opportunity to establish a long-lasting legacy. However, estate planning and legacy planning feature vastly different strategies to secure assets for friends and family.
The Differences Between Estate and Legacy Planning
Both estate and legacy planning affords individuals the means to protect their health, wealth, and well-being. In general, estate plans address how assets should be managed and distributed after death. Legacy plans, in contrast, consider how assets can be used for the greater good, whether for friends and family or a charitable cause.
While many people mistakenly believe that estate planning begins and ends with a will, the field encompasses a greater range of strategies. Under most circumstances, a quality estate plan should include:
A last will and testament
This legal document explains how a deceased person’s possessions should be distributed after their death. However, a will also provides an opportunity to make other important decisions. You could, for instance, nominate a guardian for your minor children or indicate your conditions for end-of-life care.
Powers of attorney
A durable power of attorney allows a trusted person, known in legal terms as an agent, to pay your bills and handle other financial matters if you’re ever injured or incapacitated.
An advance health care directive
Arkansas is a value-centered state, and many people have firm beliefs about the care they should receive if they’re ever on life support and unlikely to recover. By creating an advance health care directive, you can explain what steps your loved ones should—and should not—take if you’re critically injured.
A revocable living trust
While a last will and testament can help save estates from the perils of intestacy proceedings (dying without a will), it does nothing to avoid probate. A revocable living trust, in contrast, is an amendable legal entity that can receive, administer, and manage assets. When a trust’s founder passes away, any assets in the trust’s possession can be distributed to named beneficiaries outside of the ordinary probate process.
Estate planning and legacy planning are closely related disciplines. While estate planning generally involves the creation of concrete legal strategies to combat intestacy and provide inheritances, legacy planning empowers Arkansans to put their values into practice.
A legacy plan could include:
- Provisions to provide for a spouse
- A trust for a child’s education or maintenance
- Funds for a beloved pet
- Charitable giving
Legacy plans broadly present an opportunity for individuals to make arrangements for friends and family. For example, a legacy plan might incorporate:
- Direct gifts. A direct gift is a one-time contribution to an approved charity or not-for-profit organization.
- Charitable trusts. A charitable trust is a legal entity that disburses assets to designated charities. Since charitable trusts can be conditioned, a settlor or grantor may determine not only which organizations should receive assets but also how such assets should be used.
- Foundations. A charitable foundation is a form of nonprofit corporation or charitable trust that can make grants to organizations, institutions, or individuals.
Contact an Experienced Arkansas Estate and Legacy Planning Attorney Today
Estate and legacy planning may be different disciplines, but they should be considered complementary: an estate plan provides the legal means to provide for loved ones, while a legacy plan details how possessions can be used for the greater good.However, estate and legacy plans must always be carefully considered. Arkansas has specific laws that govern wills, revocable living trusts, and charitable gifts. Without the right guidance, your estate could be compromised by a technicality, so don’t leave your legacy to chance. Please send Quraishi Law & Wealth a message online or call us at 870-275-4304 to schedule your initial consultation.