There are some commonly used estate planning terms that sound similar, and this can lead to some confusion. With this in mind, we will look at the difference between a living trust in a living will in this post.
Monetary Asset Transfers
A living trust is a legal device that is used to facilitate asset transfers to your heirs after you pass away. It is a great alternative to a simple will, because there are drawbacks and limitations that go along with the use of a will.
Generally speaking, you would be allowing for lump sum inheritances in a will, and this may not be consistent with your true wishes. A will must be admitted to probate, which is a costly and time-consuming legal process that strips your family of privacy.
If you use a living trust, you could act as the trustee and the beneficiary while you are alive, so you would not surrender control of the assets. After you are gone, the trustee that you name in the document would be able to distribute resources to the beneficiaries outside of probate.
You would have the ability to stipulate terms with regard to the nature of the distributions, and you could spread them out over time. When the trust is the owner of the assets that will comprise your estate, the administration process is simplified for the trustee, and this is another advantage.
Your estate plan should include documents that allow you to seize control of decisions that may present themselves toward the end of your life. A living will, which is an advance directive for health care, is one of these legal devices.
In a living will, you state your life-support preferences, and you can address each different life support technique individually if you choose to do so. You can express your organ and tissue donation and comfort care medication choices when you create your living will.
When you have a living will place, this personal decision will be taken out of the hands of your next of kin. Your own true wishes will be carried out if you are ever in this situation, and everyone in the family will know that you made the decision on your own in advance.
To round out your incapacity plan, you should include a couple of additional documents. One of them is a durable power of attorney for health care. This would give an agent of your choosing the ability to make medical decisions on your behalf if it ever becomes necessary.
These would be decisions that are not covered in the living will. A HIPAA release should be added as well to give the agent the ability to speak freely with your doctors about your medical condition.
Access Our Free Worksheet
There are hundreds of different posts that you can explore on this blog to build on your knowledge, and we have other resources that you can access on this site. One of them is our carefully prepared estate planning worksheet.
You can learn a lot if you take the time to go through it, and it is being offered free of charge. To get your copy, visit our worksheet page and follow the simple instructions.
We Are Here to Help!
If you are ready to put a plan in place, we are here to help. Each situation is different, and the right approach will depend on the circumstances. We can gain an understanding of your objectives and your family dynamic and make the appropriate recommendations.
Once you make your decisions, we can apply our expertise to custom craft the ideal estate plan. You can set the wheels in motion if you send us a message, and we can be reached by phone at 513-721-1513.