When planning for the future, you need to understand the differences between a living trust and a living will. Both play important roles in estate planning, but they serve distinct purposes.
Choosing the right tool depends on your specific needs and goals.
How a living trust works
A living trust is a legal arrangement where assets are placed under the management of a trustee for the benefit of chosen beneficiaries. A living trust helps assets avoid probate, making the distribution process quicker and more private. This tool also provides asset management during the grantor’s lifetime, especially if they become incapacitated. Living trusts are ideal for individuals with complex estates or those seeking to keep their financial matters private.
The purpose of a living will
A living will, also known as an advance directive, outlines medical preferences in case you cannot make decisions for yourself. While it doesn’t deal with property or financial matters, it plays an important role in honoring your healthcare choices. In Arizona, a living will can specify instructions for life support, resuscitation, and other medical treatments.
Key differences between the two
Living trusts focus on managing and distributing property, while living wills address healthcare decisions. Both can coexist as part of a comprehensive estate plan, ensuring that both financial and medical wishes are respected.
Choosing the right option for you
For those with significant assets or specific wishes about property distribution, a living trust can offer flexibility and privacy. On the other hand, a living will is essential for expressing medical preferences. Including both in your estate plan ensures peace of mind for you and your loved ones.
