Thursday, November 19, 2015

Differentiating A Living Will And A Living Trust (part 1 of 2)

The two terms living will and living trust may seem a bit vague. Oftentimes, people may even use them interchangeably. However, you have to understand that a living will is certainly different from a living trust. Although both may share a number of similar characteristics, you have to know their exact definitions for you to be able to fully utilize them to your advantage.

Living Will

It is a legal document that states your wishes regarding health care decisions in the event of an unfortunate occurrence such as a terminal illness or a permanent vegetative state. This form of advanced directive will only take effect once you have shown evidence of incapacity to participate in the decision-making process with regard to your medical treatment.

Basically, the policies that govern the making and application of living wills are based on state laws concerning the matter. The statutes may hold differing views from one state to another. So be sure to follow state-specific procedures to avoid conflicts since this is, after all, a lawful document.

Other states may not have particular laws pertaining to living wills. Then again, you may take advantage of the option to appoint a health care surrogate in case you become too ill to participate in making health care decisions for yourself. As the name implies, your surrogate will act and decide on your behalf under the mentioned circumstances.

Living Trust

In essence, a living trust is a written lawful document that partly takes the place of a will. It allows you to place all your assets (i.e. residential properties, bank accounts, or stock shares) in a trust to be administered to your advantage for as long as you live. In the unfortunate event of your death, all your properties will be transferred under the names of your beneficiaries.

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