Why your life may not depend on either of these documents, your death does. Read on to find out how these two important documents can save you after death.

What is the difference between a living will and a living trust? People have been asking this question a lot lately. Basically, they are two very different types of documents.

A living will is a written document that gives instructions on what to do in the event that you become comatose or in a vegetative state. It states you do not want to be kept alive simply to prolong the dying process. If you are in a comatose or vegetative state, you want the doctors to pull the plug on any life support to allow you to die in a natural manner. That is why it is called a living will, and that is valid in the United States. The law states that you have the right to make that decision for yourself. If you are put in that situation, the directive is only valid when it is placed in writing. It relates to the end of your life, and how medical professionals will have to deal with you on the subject of prolonging your life.

On the other hand, a living trust has nothing to do with your life. Rather, it relates to your financial estate. A living trust sets forth the terms by which your estate will be handled upon your death. Unlike a will, it avoids probate. In plain English, a living trust is a vehicle that allows you to remove your assets from your own name and place them in the ownership of the trust. This means that you have to transfer the name and title of all of your assets to the name of the trust. The trust becomes the owner of all your assets. In this process, you name one or several beneficiaries, who will inherit the trust upon your death. You will also name a trustee to manage the assets in the trust.

Transferring your assets to trust keeps your assets out of the probate process. This allows your heirs to avoid probate, which takes 1 to 2 years to settle. Your estate will not be managed by the court system. You will also eliminate losing 5 to 10% of the value of your estate to attorney’s fees and court costs.

Because the trust does not have to be recorded or filed with the state, it remains a private family document. It is much better than a will because it avoids probate. This is the step that people use to get around the probate process. On the contrary, a will always goes through probate, because it has no validity until your death.

To recap, a living will is your statement that you do not want to be kept on life support in the event of being in a vegetative or comatose state. A living trust is your statement that you do not want your estate to go through probate. They are two totally separate things.

 

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