You need to make the right moves to protect your assets and healthcare before you can no longer speak for yourself. Living wills and trusts are two options that can help you prepare for your death. One focuses on your assets while the other focuses on your medical wishes. Taking a look at both of these documents can make a difference for you and your family.
A Living Trust
So, what is a living trust? A living trust gives you control to transfer your assets to a trustee. You can appoint yourself as your own trustee or assign someone else to become one. The trustee can manage your assets for you and your beneficiaries. The living trust takes place when you’re alive and is still in effect long after your death unless you include a termination date.
You can choose to have your living trust to be irrevocable or revocable. Revocable is the best option since you can change it as needed. This allows you to transfer your assets to anyone you want, and you can revoke them anytime you want as well. An irrevocable trust is a living trust that’s permanent once it’s set. That means you can’t transfer the assets to another trustee.
The type of assets you can transfer into a trust include bank accounts, investments, life insurance, real estate, and stocks. Keep in mind that some assets can’t be transferred into a trust.
A Living Will
This legal agreement determines what medical actions you want doctors to perform in the event you’re incapacitated. This comes into effect when you’re ill, injured, terminally ill, or at the end stages of your life. Healthcare professionals use a living will in the event that you can’t communicate or make your own decisions.
A living will reveals if you want to attempt resuscitation, if you wish to remain on life support, if you intend to use a feeding tube, etc. You can also grant guardianship of your children and organ donation if you choose to do so. A living will also contain information about your quality of life, such as your personal hygiene or religious affiliations.
Don’t confuse a living will with the last will. The last will decides what happens to your assets and estates after your death. A living will is about your wishes in the event you become medically incapacitated.
Differences Between a Living Trust and Will?
A living trust allows you to transfer certain assets to a trustee. The assets are protected throughout your life and then transferred to your trustee and beneficiaries. A living will only honor your wishes in the event that you become incapacitated. It’s important that both family members and medical professionals follow your wishes when you can no longer communicate.
Similarities Between Living Trusts and Wills
Both of these documents will protect you leading up to your death. A living will honor your medical wishes while a living trust focuses on your financial wishes. Both of these will honor your wishes when you’re unable to communicate them.
Do I Need a Living Trust?
You need to figure out if you need additional protection over your assets. A living trust can protect bank accounts, business assets, investments, mutual funds, real estate, and stocks. It’s important to find out if any of your finances would benefit from a living trust.
A living trust can provide additional protection in the event of medical incapacitation or death. If you can no longer manage your money, your trustee can oversee your finances for you. This also prevents the courts from choosing someone to manage your finances.
Do I Need a Living Will?
You will need one if you can no longer speak your wishes. This allows you to find out what happens in the event of medical incapacitation and terminal illness. If you don’t create a living will, the doctors will do what’s best-suited for your medical condition. Some of these decisions may not reflect your morals, values, or religious preferences.
It’s important to specify who can make those wishes on your behalf. The living will lets healthcare practitioners and family members know what to expect in the event of your incapacitation.
How to Manage Your Money
It’s always important to come up with a plan. When it comes to deciding between a living will or a living trust, don’t write off planning both documents. A living will takes the stress off your family members since it states your medical wishes. If you have assets, it’s important to determine if a living trust will benefit you.
Both documents are important when it comes to your final wishes. This can protect you and your family in the event of your possible incapacitation and death. If you’re not sure how to set up a living trust or a living will then contact a financial advisor.