Very often we get asked about the differences between a living will and a living trust. These terms can sound confusing, but don’t worry—although we can not give legal advice, we will try explain it for you as simple as possible in this article. Let’s dive in and explore these two important documents.
What is a Living Will?
A living will is a legal document that tells your healthcare providers and loved ones what kind of medical care you want if you can’t speak for yourself. It kicks in only when you’re unable to make decisions due to illness or injury.
Practical Example:
Imagine you’re in a coma after a car accident. Your living will might specify that you don’t want to be kept on life support if there’s no hope of recovery. It gives clear instructions to your doctors and family, taking the pressure off them during a tough time.
What is a Living Trust?
A living trust, on the other hand, is all about your assets—like your house, bank accounts, and investments. It’s a document that places your assets into a trust for your benefit during your lifetime, and spells out how they should be distributed after you pass away.
Practical Example:
Think of a living trust like a treasure chest. You put your valuables in the chest (the trust) while you’re alive. You get to enjoy them while you’re around, and when you pass away, the chest is handed over to the people you’ve chosen, following your exact instructions. This can help avoid probate, which is the legal process of distributing your estate and can be time-consuming and costly.
Key Differences: Living Will vs Living Trust
Purpose:
- Living Will: Manages healthcare decisions when you can’t.
- Living Trust: Manages and distributes your assets.
Activation:
- Living Will: Only comes into play if you’re incapacitated.
- Living Trust: Active as soon as you create it and fund it with your assets.
Probate:
- Living Will: Doesn’t affect probate.
- Living Trust: Can help your estate avoid probate, making the process quicker and easier for your beneficiaries.
Why You Might Need Both
You might be wondering if you need both a living will and a living trust. The answer is usually yes! They serve different purposes and complement each other.
- Peace of Mind: A living will ensures your healthcare wishes are known and respected.
- Smooth Transition: A living trust makes sure your assets are handled exactly as you want, without the hassle of probate.
Simple Steps to Get Started
- Think About Your Wishes: What medical treatments do you want or not want? Who do you trust to manage your assets?
- Talk to a Professional: I can help you draft these documents to fit your needs perfectly.
- Review Regularly: Life changes, and so might your wishes. Make sure to update your living will and trust as needed.
Final Thoughts
Creating a living will and a living trust might seem daunting, but it’s really about taking control of your future. By setting up these documents, you’re making sure your healthcare and assets are managed according to your wishes, giving you and your loved ones peace of mind.
Remember, it’s all about planning ahead so you can enjoy today without worries about tomorrow. If you have any questions or need help getting started, feel free to reach out. Let’s make sure your wishes are known and respected, now and in the future.
By the way, if you found this information helpful, don’t forget to share it with family and friends. It’s always a good time to start planning for the future!