Even though they are aware of its importance, many Americans still don’t have an estate plan. One common reason given is that people don’t know where to start. Most estate plans are built around a last will and a living will. Though they are used for different purposes, both can help people protect their interests in the future.
What is a last will and testament?
A will, or last will and testament, is a legal document that allows a person to dictate how their property and assets should be distributed after death. It only becomes effective when the testator, or whoever wrote the will, passes.
To carry out their wishes, the testator must appoint an executor. The executor’s duties include settling the decedent’s debts, finalizing financial matters, and distributing assets to beneficiaries.
A will can also be used to name a legal guardian for the testator’s children, pets, or other dependents after they pass away. This might provide the testator peace of mind knowing their loved ones will be cared for when they are gone.
Without a will, the state’s intestacy rules may dictate who gets the deceased person’s property and assets.
What is a living will?
An advanced health directive, sometimes known as a “living will,” is a legal document that specifies the kind of medical treatment the testator wants to receive in the event of incapacity. In contrast to a last will, a living will can take effect while the person is still alive.
Terminal illness, mental disabilities or serious injuries may render a person unable to make decisions for themselves. If the testator can no longer communicate or participate in the decision-making, their physician and loved ones may refer to their living will. Testators may use the living will to provide instructions or specify the type of care they wish to receive under certain circumstances.
Preparing these choices while one is still capable could save the testator’s loved ones from having to make these extremely tough decisions on their behalf.
A last will can allow people to direct how their assets are distributed after death. In contrast, a living will enables people to specify their preferred medical interventions if incapacitated. Although the two wills serve different functions, they are equally important in carrying out the testator’s true intentions.