What's the Difference Between a Living Trust and a Living Will?
Living wills and living trusts are estate planning tools with similar names, but they couldn’t be more different. A living trust, also known as a revocable living trust, is becoming an increasingly popular way to transfer assets to the next generation without the need for a probate proceeding. A living will is a document that outlines what you want to happen if you’re incapacitated and near death. If you’re getting on in years, and haven’t developed an estate plan, it’s important to speak to an experienced estate planning attorney about your options.
Why Are Living Trusts Becoming So Popular?
One of the main attractions of a living trust is avoiding the hassle and expense of probate proceedings, but there are many other reasons why it’s helpful. A less well-known problem of probate is that it creates a public record of your assets and beneficiaries. A living trust allows your assets to pass privately. Your assets are placed in a trust but remain under your control as long as you're alive and have capacity. If you become incapacitated, the co-trustee or successor trustee that you’ve named can take over management of the trust’s assets for your benefit. When you pass, the successor trustee will either disperse the assets to the beneficiaries you’ve named or continue the trust according to your specifications. The trust is revocable, so you can change it or end it at any time.
The Importance Of A Living Will
Specifying your wishes for medical treatment should you become incapacitated helps your spouse or children feel confident that they’re doing the right thing when faced with tough decisions. You can specify exactly how you feel about life sustaining efforts for a wide range of scenarios and express your wishes about organ donation and palliative care. You can describe specifically when you would want to be put on a ventilator or be resuscitated. Living wills are often incorporated into advance medical directives that appoint a trusted relative or friend to speak for you to health care providers to ensure that they carry out your wishes. If you have a living will, but don’t have an advance medical directive, health care providers will do their best to carry out what you’ve specified in your living will.
There are many other ways that an estate planning attorney can help you smoothly transfer your assets to the next generation and plan for incapacity. Estate planning can bring you peace of mind and help your family remain calm during their time of mourning.
