An overview of these types of wills and when you might create them
If you’re thinking about creating a will, it’s important to understand common legal terms and the types of legal documents available for future asset protection and distribution. You may have heard the terms “Living Will” and “Last Will and Testament” often enough, but you may not know that these are very different legal documents. Here is a brief look at what these terms mean and when these types of wills are made.
A Living Will
A Living Will – a type of advance directive – is a legal document in which a person states his or her wishes for end of life medical care if they are not mentally able to make the decision when the time comes.
The document is often included with a Health Care Power of Attorney which designates someone who would then consent to medical care on the patient’s behalf. The Living Will takes effect when the patient is unable to make health care decisions for any reason. A doctor must certify that they are unable to make important decisions at that time.
As the National Academy of Elder Law Attorneys (NAELA) points out, the designated agent will have the same authority over decisions as the person would have themselves.
The Living Will can also provide a statement that a person doesn’t want his or her life to be prolonged using artificial measures. Having these decisions recorded in advance allows family members to rest easy that they are making the same choice that the patient would have made had he or she been able.
When to create a Living Will
According to research from Health Affairs, only a third of Americans take steps to have a Living Will.
Typically, attorneys assist all types of clients with these documents, whether they are young, elderly, or those with terminal diseases. When you meet with an attorney about estate planning, it may be a good idea to create a Living Will at that time.
A Last Will and Testament
A Last Will and Testament is what you have probably seen or heard about more frequently. This is the legal document that dictates what happens to a person’s assets and property after their death.
For example, one may decide to outline in their Last Will and Testament which of their children gets what property. Or, a Last Will and Testament could state whether a person wanted some of their financial assets to be donated to a group or organization. Oftentimes, Last Wills contain testamentary trusts to address beneficiaries’ disabilities, poor spending habits, age, or drug use.
The testator – the person who died leaving a Last Will – will assign an executor who is charged with distributing the estate. This important document helps relatives and friends follow the wishes of the deceased.
When to create a Last Will and Testament
It’s important to create a will even if you have don’t have substantial assets to pass along after your death as it makes the estate distribution process less complicated for your friends and family and ensures that your assets go to the people or charities of your choosing.
If a person fails to create a will during his or her lifetime, that person is considered to have died intestate, and the executor then becomes the state. In that event, the state decides how to distribute the property by referring to the state’s intestacy statutes.
These tough legal situations are often difficult for family members to navigate and often result in conflict, especially where the decedent would have chosen differently if he or she had acted while still alive.
What is a Living Trust?
Another common legal document that governs asset distribution is a Living Trust. This is similar to a Last Will and Testament in that it dictates how to manage your estate according to your wishes. A Living Trust is funded during life and may be used for a multitude of purposes, including asset protection, privacy, probate avoidance, estate tax avoidance, or ease of distribution.
At NJ Elder Law Center at Goldberg Law Group, our experienced team can assist you with creating a Living Will, Last Will and Testament, or Living Trust and can address any questions you may have about will and trust law. Get in touch with us today to discuss your options or to learn more about estate planning and Medicaid planning.