“Living” wills, “living” trusts – they are terms that some folks in Washington State use interchangeably. They are just about the same thing, right? Wrong! Each has its own place in one’s estate planning. They should not, however, be confused.
Advance Medical Directive
A living will, sometimes known as an “advance health care directive” or an “advance medical directive,” is a signed document, typically given to physicians and other healthcare providers, in which a person’s preferences related to end-of-life medical care are made known. The idea is that the document can provide guidance to medical care personnel, if the patient is no longer able to make decisions for himself or herself, due to incapacity or illness.
Durable Power of Attorney
Often, the living will is supplemented by a durable power of attorney, a specialized legal document that appoints another person – often a family member – to make medical and/or financial decisions for the patient in the event of incapacity. Both the living will (advance medical directive) and the durable power of attorney are extinguished by the person’s death.
Funded With Assets While the Trustor is Alive
A living trust is altogether a different type of document. Properly drafted, its provisions are not necessarily extinguished by the person’s death. It is referred to as a “living” trust to distinguish it from another popular type of trust – the testamentary trust – that is created through the provisions of the person’s Last Will and Testament only upon the person’s death.
Living trusts are usually revocable. In that fashion, they can be terminated – or merely amended – if the person’s needs change. Because they are revocable, living trusts typically have few tax consequences. Establishing a living trust essentially creates a new entity, to which the person (called “the trustor”) transfers ownership of some or all of his or her assets. As with any estate planning document, the specific provisions of a living trust will vary from person to person. One should consult with experienced legal counsel before establishing such a trust.
Advantages of Living Trust
Living trusts offer a number of important advantages over other types of estate planning documents. Those include:
- Relative ease of amendment. As noted above, if the circumstances change, so can the trust document.
- Some measure of privacy. Generally, the living trust does not become part of the deceased’s probate file. That probate file creates a public record that many persons want to avoid. Since the living trust is not part of the probate estate, it may save some expenses in the administration of the deceased’s estate.
- Flexibility in handling current assets. Often, trustors resort to living trusts as a means of turning over the day-to-day maintenance of one’s investment portfolio and other assets.
Have You Considered a Living Will or a Living Trust?
Have you communicated your preferences for end-of-life medical treatment? Do you have in place a durable power of attorney to allow for the smooth handling of your affairs, if you became too ill or debilitated to manage the matters personally? Would your estate plan be enhanced by the establishment of a living trust? Blado Kiger Bolan, P.S. has over 50 years of combined experience providing quality estate planning legal services throughout the Pacific Northwest. We strive to find simple solutions – even if the problem is complex. We can assist you with wills, trusts, powers of attorney, and many other important documents. We work collaboratively, both with our clients and with other attorneys in the firm. That way our clients can benefit from the many strengths that our attorneys can bring to bear on an issue. For assistance with any type of personal injury issue, contact us on the web, or call our Tacoma or Puyallup office at 253-272-2997.