Many people confuse Living Wills with Living Trusts, and yet these legal documents serve two completely different purposes. Learn what a Living Will is, what a Living Trust is, and how to never confuse these two documents ever again.
What is a Living Will?
A Living Will is a legal document that allows you to write down your wishes with regard to what medical procedures you want, or do not want, to receive if you are in a irreversible coma, have been diagnosed with a terminal illness, or are suffering from a severe injury and are not expected to fully recover. In other words, a Living Will is specifically designed to deal with questions about life ending versus life sustaining procedures in the event you are terminally ill.
A Living Will can be incorporated into an Advance Directive, also called an Advance Medical Directive, which is a legal document that allows you to designate someone to make health care decisions on your behalf if you are unable to do so for yourself.
What is a Revocable Living Trust?
On the other hand, a Revocable Living Trust is a legal document that is created by an individual, called a Trustmaker, to hold and own the Trustmaker's assets, which are in turn invested and spent for the benefit of the Beneficiary (who is really the Trustmaker) by the Trustee (who is also really the Trustmaker).
A Revocable Living Trust is also referred to as a Living Trust, Revocable Trust, Inter Vivos Trust, or Declaration of Trust.
Living Wills vs. Living Trusts
By its design a Living Trust covers all three phases of your life - while you're alive and well, while you're alive but not so well, and after your death - while a Living Will only covers what happens to you if you are near death.
What a big difference. If you are not sure if you have a Living Will, a Revocable Living Trust, or both, then meet with an estate planning attorney to make sure that you have all of your bases covered.