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Financial Planning vs. Estate Planning

Posted by Dana Law Group on June 26, 2022

When you are engaging in planning for the future of your finances, you may have heard about both financial planning and estate planning. But, what’s the difference between them? There are a lot of differences, and each serves a different goal.

Estate Planners

When you go to an estate planner, this is usually an attorney with expertise in trusts, tax law, estate administration, and probate. This attorney can help you to create your documents for your estate planning. As a part of your estate planning, you might be drafting a trust, a will, your healthcare directives, and your living will. Having an estate plan is an important part of planning for your finances in the future. The attorney you use can assist you with making goals and can create an estate plan that is customized for you. It can provide the security you’re looking for for your family and the protection of your assets. It can also help keep your taxes as low as possible and help your family to avoid the difficulties of probate.

Financial Planners

When you work with a financial planner, you have that planner look at the financial situation you are in, helps you to figure out what your financial goals are, and then develops strategies to help you to achieve them. The planner will help you to meet the financial goals that you’ve set for the short and long-term by using investments. Some of the goals the planner may help with can include boosting your 401K, buying a home, or funding a college fund. Financial planning is an important part of planning for your future, but it doesn’t provide any plan for who will take care of your affairs if you aren’t able to. Those types of plans come under estate planning.

Estate Planning and Financial Planning

The two are not the same, though they both concern the future of your finances. The two of these categories are very different, and they each work toward different financial goals. Financial planning can help you to build wealth, while estate planning uses a number of tools to help you to preserve your wealth ad to distribute it once you are gone. In some cases, estate planning can include some of the same general areas as working with a financial planner, but a financial planner can’t advise you about an estate plan or help you to draft those documents. It’s important to have both a financial planner and an estate planner to handle both of these aspects of the future of your finances.

When you need legal planning, call us at the Dana Law Group to get the legal assistance you need to plan well for the future.