This is an article from The Potter Law Firm (https://www.potterestateplanning.com/) in Ashland, Kentucky, that we thought others may find helpful.
There are various legal devices used in the field of estate planning. Sometimes people are confused because the terms sound so similar. With this in mind, let’s examine the differences between living trusts and living wills.
Revocable Living Trusts
A revocable living trust is a very useful estate planning tool. With this type of trust, you retain control of the assets throughout your life. It is possible to dissolve the trust entirely and the person who creates the trust will usually act as the trustee and the beneficiary initially.
When you create the trust, you include instructions that the trustee who will succeed you must follow after your passing. Because of this arrangement, you make measured distributions to the beneficiaries over an extended period of time if this is your choice. If you go this route, you can be sure that your loved ones do not burn through their inheritances too quickly.
However, if you would prefer to allow for lump sum distributions, this can be done as well.
When a living trust is used as a vehicle of asset transfer, it helps avoid the probate process. This process would come into play if you use a last will to facilitate asset transfers.
Probate provides oversight, but it can be time-consuming and expensive so probate avoidance is often appealing to people.
Living Wills
You have invariably heard of the legal document called a last will or last will and testament. This type of will can be used to record your wishes regarding the distribution of your monetary assets after your passing.
A living will serves an entirely different purpose. Sometimes people who are unable to communicate can be kept alive indefinitely through artificial means, even if there is no hope of recovery.
You would use a living will to state your preferences regarding life-sustaining measures like mechanical respiration, artificial hydration, and artificial nutrition.
- Preparing for Unexpected Incapacity - April 30, 2021
- Beneficiary Designations and the SECURE Act: Eligible Designated Beneficiaries - April 24, 2021
- “Last Will and Testament” Origin - April 22, 2021
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