Living Wills and Living Trusts are two common documents used in Estate planning that most people have heard of. They may sound alike, but it is important to know that they serve two very different purposes. Pull up a seat and let’s explore the critical ways these documents differ and how they can both help you and your loved ones protect and preserve your legacy!
A Living Trust covers three phases of your life, while a living will focuses on what happens to someone who is incapacitated. A living will clarifies your end-of-life care decisions and becomes void after death. A trust however can appoint a trustee to manage your assets if you become incapacitated. A trust can also allow the trustee to distribute your assets according to your wishes after death with as little cost and frustration as possible.
How Living Wills work
In a case where you are in a coma or some sort of terminal illness your family will want your guidance about your end-of-life decisions. This includes if you want to be resuscitated or placed on a ventilator. This document is specifically designed to deal with life-ending and sustaining procedures. It also deals with organ donation. It allows for your wishes to be clearly expressed during times in which you are unable to speak for yourself and gives those you cherish most peace of mind by understanding your desires.
How Living Trusts work
Living Trusts are managed by trustees. This trustee serves in this role when the living trust is revocable. It is also common practice to designate a successor trustee to manage the trust in case the trustee becomes incapacitated or passes away. Trusts help to maintain your affairs while you are alive and well. It also serves you when you’re incapacitated in that it permits your trustee to manage your estate without court intervention or guardianship. Upon death, your trustee will ensure your hard-earned assets pass to the beneficiaries named or might keep the trust running if that is in your wishes.
Other things to consider
Wills can be incorporated into advanced medical directives. This allows you to designate others to make health decisions for you if you are unable. An advanced medical directive is not the same thing as a will but a separate document. A living will does not require someone to speak for you, it simply states your wishes for what you want done under life-threatening measures.
A similarity between a revocable living trust and a living will is the safeguard of your mental incapacitation. Your successor can take over the management of your trust at a point in which you are no longer able to. A living will can do much of the same thing when it comes to your health care. Meet with an estate planning attorney to make sure you have this all covered. If you are not sure what you need you can pass your estate on to beneficiaries in many other ways, but only a living will can fore sure state the end wishes for your life.