Introduction
Wills and living trusts are two legal documents that can be written down by you for the future. These two legal papers are significantly different even though they have a similar tone and share a crucial component. When sitting down to plan for the future, it’s vital that you understand the difference between the two. Below, we'll examine what they are and how they compare.
Living Will | Living Trust |
Used to make decisions about future medical treatment. | Used to make decisions about your estate and who inherits it accordingly. |
Upon your death, it is void and does not allocate anything. | Allocates your assets in accordance with your desires after your passing. |
Enters the picture only when you are unable to speak for yourself. | Works even when you are alive and well, or in any other case too. |
What is living trust?
A living trust is a document that you may use to specifically state who receives your property and how much they inherit, much like a will. But the differences between the two papers stop there. The primary function of a living trust is to replace the role of an executor working with the probate court by naming a trustee to administer and distribute your estate and assets after your passing.
Revocable and irrevocable living trusts are where living trusts differentiate a bit. The trust creator is not permitted to serve as the trustee of their irrevocable trust and must give up any future rights to reclaim ownership of the assets. Once a living trust is established, a trustee administers it as long as he or she lives.
What is living will?
In today’s world, there are so many legal documents to consider, and the process of remembering all of them can be highly confusing. Making decisions about future medical care involves writing down a living will. It is an advanced health care directive – meaning it will tell doctors what to do when you are not in a condition to speak for yourself.
A Living Will becomes necessary when you cannot communicate your desires for yourself. Wills also serve as last letters to family and friends, letting them know what decisions you would have made if you had not been able to express your wishes
The difference between a living will vs living trust
Both living wills and living trusts can be helpful instruments to direct your future according to your wishes. Despite having similar sounds, they both have pretty diverse functions.
· You can think about using a living trust to control how your assets and money are distributed to your heirs. A living will is created expressly to address your feelings over future medical procedures for your own body.
· While a living trust only covers what happens if you become disabled, a living trust covers all the stages of your life.
· A Living Trust can aid in handling your affairs while you are still conscious. Additionally, it keeps things to your preferences even while you're still alive but not feeling well and when you pass away. On the other hand, a Living Will only becomes relevant when you are unable to express your preferences for yourself.
If you're uncertain about whether you require a living will, a discretionary living trust, or both, speak with an estate planning lawyer to be sure you've covered all your bases. There are many alternative methods to transfer your inheritance to your intended beneficiaries, but only a living will allow you to express your end-of-life preferences clearly.
A revocable living trust and a living will are similar in that they both provide protection in case of diminished mental capacity. If you ever find yourself unable to manage your financial affairs, your successor trustee will take over the management of your trust. The same thing may be accomplished about your medical treatment through a living will. If the day ever comes when you are unable to do so, both will effectively convey your wishes.
Conclusion
Although they both have quite different roles, they both have similar noises. Both living wills, as well as living trusts can be beneficial tools to shape your future in the direction you choose. Your thoughts towards potential medical operations for your own body are addressed explicitly in a living will. A trustee is named in a living trust to oversee and distribute trust assets following your death. While you are still conscious, a living trust can help you manage your affairs. It maintains things according to your preferences even after your death and while you are still alive but not feeling well.
Frequently Asked Questions
Q: What is the difference between revocable and irrevocable living trusts?
A: If the grantor is competent, they may modify a revocable trust at any point throughout their lifetime. The majority of the time, an irrevocable trust cannot be amended. It can be considered for amendment with a court order or the trust's beneficiaries' consent. Have a session with an estate planning attorney to help you fully decide which one you should be going for.
Q: Till when does a living will last?
A: A living will is valid until you die or take action to revoke it. Once you die, you are not able to receive any medical treatments. Hence, a living will becomes null and void when you pass away.
Q: How to revoke a living will?
A: It can only be done by shredding or otherwise getting rid of all copies. As it depends on other people, inform the others as well. Reach out to those who have received a copy that it’s no longer valid by getting in touch with them.
