Estate planning is a crucial part of planning for our future. Part of estate planning is creating living wills and trusts. Both are essential components throughout the estate planning process.
We need to understand what living wills and trusts are in order to best plan our own estate. This comprehensive guide will explain how estate planning works and why it’s a necessary part of future planning.
Living Wills and Trusts: The Basics
It’s not uncommon to wonder, “What is estate planning and why is it important?” Estate planning protects your assets and your beneficiaries in the event that you are unable to.
There are two very important parts of estate planning: living wills and living trusts.
There is a will versus a living will. Living wills are not the same as a Last Will and Testament. They do not leave property or money to anyone.
We call them living wills because the person they refer to is still alive. However, if the person is unable to communicate their final health care wishes, the living will is used.
They set guidelines for health care if someone is at the end of their life. They express a person’s preference in terms of life support. Living wills speak on a person’s behalf in the event that they are unable to choose their end-of-life care.
A living will may also include directives for tube feedings and whether or not pain medication is administered. They can be used if a person is critically ill or is unresponsive and kept alive artificially.
The Importance of Living Trusts
A living trust is a legal document that names a trustee as the person responsible for overseeing a beneficiary’s assets. They help to shorten the often expensive and lengthy process of going through probate. Living trusts allow for a more seamless transfer of funds for the trustee to access.
If looking for additional protection over assets, then a living trust may be the best choice. When a person is unable to manage their personal finances due to age or illness, a living trust allows a trustee to step in and manage those finances.
Estate planning is essential when thinking about the future, and living wills and trusts are an important part of the process.
Be Prepared for the Future
A living will and trust are an imperative part of the estate planning process. Living wills ensure health care professionals understand a person’s wishes should they be terminally ill or in a vegetative physical state and unable to communicate.
Living trusts will provide an extra layer of protection over assets. They appoint trustees to manage assets and make the transfer of funds an easier process.
Living wills and trusts are both critical parts of the estate planning process. They not only protect the person creating them but any children and beneficiaries they may have.
Explore the rest of this site for more tips to help you plan your estate so you and your loved ones remain protected.