NASE Blogs

Living Wills And Trusts

Wednesday, March 23, 2011

Q: What’s the difference between living trusts and living wills?

A: A "living trust" is an estate planning document that can be used to augment or replace a last will and testament. (See our blog topic: "What is a Revocable Living Trust?") A "living will" is very different.  A living will is essentially a health care directive. In fact, more and more commonly living wills are called "advance health care directives". 

In the event that you become incompetent an advance health care directive tells your loved ones and medical professionals what your wishes are with respect to medical treatment or the desire not to have medical treatment. For example, you can indicate whether or not you want artificial means used to prolong your life.

The requirements for a valid living will/advance health care directive may vary from state to state.  Some states even provide specific forms for drawing up an advance directive.  You might be able to find such a form recommended for your state by doing a GOOGLE or other search using the following terms: < advance health care directive Alaska > or < living will Alaska >.  (Obviously you would substitute the name of your state for "Alaska".) If you find a suggested form for your state you should be able to print and complete it with little difficulty.

An advance health care directive should be accompanied by either or both of the following:  A Revocable Power of Attorney - Medical, and A Revocable Power of Attorney - Financial.  The reason for these documents is that if an individual becomes incompetent someone needs to be empowered to care for them with respect to important decisions.  These decisions include assuring that the advance health care directive is followed, and other medical and financial decisions as the need arises. The medical power of attorney and the financial power of attorney can be, but need not be delegated to different individuals according to the grantor's wishes. 

Living trusts, on the other hand, are most often used to avoid a lengthy and expensive probate process. A living trust requires that you place some or all of your assets in a trust, usually a revocable trust.  In individual would normally set up a living trust for his or her own own benefit while alive. After his or her death the living trust would contain language directing how the trust assets will managed and or distributed for the benefit of heirs.
 

 

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