Many of our clients misunderstand the difference between a living will vs. living trust. In fact, while most people have heard of both terms, many wonder what each means, and how – or if – they are related.
First, both living wills and living trusts are estate planning forms. In other words, a person uses them to document their decisions about end-of-life matters ahead of imminent death. However, these forms have different purposes. For example, a living will relates primarily to decisions about your medical care. On the other hand, a living trust deals mostly with financial matters.
Regardless of which documents you choose to write, remember that everyone should have the most basic estate-planning document – a last will and testament. Without proper paperwork, the government will decide who receives your money and property upon your death. Plus, they may even determine other important matters like who cares for your children! Therefore, it’s important to be properly educated on which estate planning forms are right for you.
Living Will – An Overview
A living will is a document that lets your family, your medical team, and legal authorities know your wishes if you become medically incapable of making decisions or when you are terminally ill. As a result, a living will is also referred to as an Advance Healthcare Directive in California.
Everyone – regardless of wealth or family status – should have a living will, along with a few more related documents. However, note that a living will is not the same as a last will and testament. At A People’s Choice, we can help you and your family draft all the necessary documents that meet your particular needs and situation. Contact us for more information.
Living Trust – An Overview
A living trust is a legal document that puts a person’s assets into a trust to be administered for their benefit during their lifetime. Then, upon the person’s death, the living trust’s property is transferred to their designated beneficiaries.
Typically, a living trust is a more sophisticated legal document for people with a certain amount of money and property, or with family situations that require some special planning in case of a death. Additionally, a living trust spares your family the time and expense of the usual court-supervised administration of your estate, or probate. Plus, your survivors will also benefit from substantial tax savings.
Although this document is intended to substitute for a last will and testament, its benefits begin during the person’s lifetime. In fact, most people name themselves as trustee. Therefore, they can effectively control the assets they have transferred to the living trust. However, note that not everyone needs a living trust. Instead, for the right person, it can be the valuable centerpiece of a prudent plan for the transfer of assets on death.
Living Will vs. Living Trust – Legal Document Assistance
California has special laws regarding the formation and administration of a living will vs. living trust. Therefore, for these types of estate-planning, you should consult an experienced legal professional. Luckily, A People’s Choice can help you prepare a living trust or a living will and get your estate plans in order. Call 1-800-747-2780 to schedule your document preparation.