Death is a reality that everyone has to face. While other depart early in life others live to see their grandsons and daughters. But still, even by the fact that someday curtains will come down, not many people have taken that into account, not many people are prepared for it. Have you ever thought what will happen to your hard-earned assets? And what position will you leave your family in after your demise?
When it comes to will management, proper estate planning will help you set up a smooth transition and declaration of your property or assets. Generally, there are four estate planning instruments that are widely used to distribute assets among beneficiaries as directed by the estate holder. These tools are last will and testament, a living will, a living trust and the power of attorney.
While these instruments serve to ensure proper distribution of assets, it is important to note that they differ in certain areas, one of them being the application. But the focus of this discussion is to bring out the main difference between a living will and a last will and testament. These are the two most confusing estate planning tools.
Living will
This is an estate planning tool that focuses on the individual’s health and medical needs. A living will is often an ignored subject when it comes to wealth and property valuation, but surprisingly, it’s an important element that provides directives for the family should the estate holder become critical sick to make sound decisions. About 72% of American seniors have a living will and it’s very crucial for you to have one too. Typically, a living will consist of a list of instructions that govern the family and medical professionals on which steps to take should you become incapacitated.
Living wills can be simple or complex depending on your wishes, and the some of the specific directives may include the choice of remaining on life support or not, or whether or not certain medical drugs should be used. According to your wish, you either omit or add certain medical care approaches from the will. To ensure the will is followed to the letter, many people seek the power of law attorney who probates the will and ensures is adhered to. Normally, a complex will may extend up to two years to probate, but even a basic one may take at least six months.
Last will and testament
This is another legal document that not only specifies who are the beneficiaries of your estate or property, but also determines what each one of them is entitled to. Generally, any last will should designate a personal representative, popularly known as executor, whose task is to oversee the distribution of assets and carry out the instructions of your will. In addition, your will may also include a name of a guardian in case you have a minor who’ll need to be taken care of in your absence. In fact, many people setup a trust fund for minors and young children who are limited by age to handle properties or any form of a gift. As the last will outlines your final wishes, it is important that it is kept up-to-date to include every asset you might own, and any adjustment has to made when necessary.
