There is a lot of confusion regarding the difference between these two documents that serve very different purposes in your estate plan.
The Living Will
The Living Will is a health care advance directive that comes into effect when the client is no longer able to make their own decision regarding end-of-life medical decision to keep the client alive. Think of this document as marking your intent for health care decisions for irreversible, terminal conditions.
This document works with your Health Care Power of Attorney. The Health Care Power of Attorney is used in situations where the client is unable to make their own general medical decisions and the Living Will is considered instructions for the Health Care Power of Attorney and the doctor regarding the end-of-life treatment that the client would like. You can customize your Health Care Power of Attorney instructions to include what specific treatment you would like in different medical situations (even not terminal, imminent death situations).
The Last Will and Testament
The Last Will and Testament deals with the distribution of your assets. This is the traditional “Will” that people typically talk about when they want to leave property to their loved ones. The Last Will and Testament will designate a Personal Representative to help with the distribution of your property, which should be the same people as your successor trustees if you have a trust.
When you have a trust, clients should have a “Pour Over Will” that states that all property should flow through the trust if an asset is accidentally left out of the trust. This will help to avoid having to open a probate with the court. If an asset is left out of the trust and the value is over $50,000 in Indiana, a probate must still be opened, but the Pour Over Will is evidence to the judge that the property was meant to be passed through the trust.
The purpose of having the assets pass through the trust is so that you can avoid a full probate and to leave protected assets to your loved ones. To learn more about these protections, please check out our video: Truth About Estate Planning.
A well-done estate plan should include planning for both health decisions and financial decisions in the event of disability or death, so that your loved ones do not have to make these decisions during an emotional time.
Additionally, your documents, such as a Living Will and a Last Will and Testament, are state law driven documents; therefore, if you move to a different state, you should update your documents to comply with state format and state law.
If you would like to discuss your estate planning goals at a free consultation, please feel to contact us.