Life can be unpredictable, which is why it’s important to think about those unlikely situations that are, well, unlikely to happen, but could have huge consequences if they did.
A will sets out the direction of your assets after your death, while a living will focuses on giving directions regarding your medical care if you find yourself seriously ill and unable to communicate these directions yourself.
Let’s take a closer look at these two types of will.
A living will is a legal document containing medical directions relating to a person’s care in the event that they become seriously ill or incapacitated and cannot communicate these decisions themselves.
Due to the complex ethical questions surrounding a person who is on life support, or who has experienced an accident that significantly reduces their quality of life, living wills tend to deal with matters such as feeding and breathing tubes, life support, and life-sustaining medical treatments.
A living will becomes effective when the person who wrote it is in a medical condition specified by state law, where they cannot communicate or make medical decisions themselves.
It’s also possible for an individual to be authorized to communicate with the doctors and other medical personnel regarding what they can and cannot carry out in accordance with the living will, which is a role usually adopted by a health care power of attorney, which is often included with a living will.
A person can change or revoke their living will at any time so long as they are still capable of doing so.
A last will and testament, known simply as a will, is a legal document containing your wishes regarding the distribution of your property and the care of any minor children after you pass away.
No will is likely to cover every single issue after your death, and they can vary in effectiveness, however, a will can help ensure that your wishes are carried out after you’re gone, and also reduce the amount of money, time, and emotional energy your heirs need to spend to ensure your affairs are settled.
Main Difference Between Living Will and Last Will
As you can tell from the above descriptions, the main difference between a living will and a last will is when they become effective.
A living will sets out instructions for your medical care if you find yourself ill or incapacitated to the extent where you’re unable to communicate decisions yourself. Living wills often contain information concerning life support machines and breathing equipment.
Last wills set out your wishes regarding the direction of your money, children, and property after you die, and are there to provide peace of mind so that your wishes are legally binding and therefore obeyed when you are no longer around.
Do I need a trust or a will?
In order to decide whether you need a trust or a will, let’s first take a closer look at what a trust is.
A trust is similar to a will in that it’s another method of estate transfer. A trust is a relationship in which you allow another party to handle your assets for the benefit of a third party - your beneficiaries.
There are many different types of trusts, though they can be broadly categorized into living and testamentary trusts.
Everyone should have a will, but not everyone needs a trust.
If you have property and assets to place in trust, and also have minor children, it makes sense to have both, as this way the decision of who will look after your children will not be left up to the state. It also protects any inheritance.
A trust will streamline the process of transferring an estate after you’re gone, while also avoiding the lengthy and potentially expensive period of probate.
It’s also possible to create a trust for the primary purpose of avoiding probate court; this is called a ‘revocable living trust.’
Some experts recommend having a will and a trust, though this is a personal decision. Generally speaking, a will is less expensive and easier to set up, while a trust can be an expensive and often complex legal document that isn’t necessary for everyone.
Which is better: a will or a gift deed?
If you want to gift a property to a loved one for them to enjoy straight away, you can acquire a gift deed - a legal document that allows you to transfer ownership of the property to a relative or close friend without monetary consideration or "in consideration of love and affection".
Both a will and a gift deed are legal procedures and have principles and guidelines that need to be followed accordingly.
Whereas a gift deed is mostly irrevocable and makes a property available soon after the gift deed has been authorized, a will is revocable and takes time to process.
Even though a will is more time-consuming to carry out, it does allow you to carefully think through your decision, whereas a gift deed is more spontaneous in its nature.
A Gift Deed is usually used to transfer property between family members, and for this reason, the transaction may be subject to coercion or fraud.
This could result in the Gift Deed being challenged in court, which is why it’s important that your witnesses are ‘disinterested parties’ - i.e. someone who does not benefit
from the gift deed, and will not have a stake in the transfer of property.
Thinking about who your property and assets will go to after you pass away can be a difficult, but albeit important, decision-making process to go through.
There are many different methods of estate transfer to consider, and you can find the one that best suits your circumstances.
A living will is also a good idea, as this takes care of medical decisions relating to your care if you have an accident or illness that means you are unable to communicate your wishes yourself.