Whenever you delve into any financial or legal discipline you’re going to run into many different terms, and when you are new to these areas some of them will seem foreign and confusing at first. Of course estate planning is this type of field because it involves the utilization of so many different types of financial instruments, and some of them are different forms of the same essential vehicle. But even if it is your first day exploring the realm of estate planning there is one term that you probably feel extremely comfortable with: the simple will, or last will and testament. Everyone is aware of this document as a vehicle that allows for the transfer of assets to your loved ones after you pass away.
There is another type of will that many people have heard about but may not fully understand called the “living will.” Because of the modifier “living” and the fact that the typical will enables the transfer of assets, there are those who confuse the living will with a living trust, which also is used to transfer assets to your loved ones. However, a living will does not involve asset transferal; it is a document that is used to elucidate your medical preferences so that your wishes are known should a time come when you are unable to communicate them due to incapacitation.
To understand why you may want to include a living will as a part of your broader estate plan simply think back to the case of Terri Schiavo that was so prevalent in the news during the decade of the 1990s. Ms. Schiavo fell into a vegetative state after suffering cardiac arrest in 1990, and later in the decade a legal battle ensued between her husband who wanted her feeding tubes removed and her parents who did not. Had Terri executed a living there would have been no need for this tense stalemate between her loved ones and her own wishes would have held sway.
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- Beneficiary Designations and Other Non-Probate Transfers - August 15, 2020
- Leaving Assets Can Be Tricky – Part 3 - August 13, 2020