Sometimes called a advanced directive, a living will is a document that states your wishes in certain health-related scenarios. Whereas a power of attorney lets you give another person decision making power over your care and assets if you’re incapacitated, a living will lets you spell out exactly what you want done in specific cases. Often times, this involves what might happen if you’re in a coma or cannot be resuscitated.
Trusts are a great way to provide for the people, animals, and organizations you care about. In a trust, you set aside certain assets outside of your last will. This keeps them from going through the probate process (which can be expensive and slow) and usually, the taxes on assets in your trust are less onerous than traditional estate taxes.
Living trusts (revocable trusts) and wills are methods for carrying out your wishes and providing instructions for disposing of your real and personal property when you die. Both documents offer instructions for your representative about how you want your assets distributed in the event of your death, but there are huge differences that can make a will or a living trust preferable over the other when preparing your estate plan. Although the documents might appear on the surface to be similar, there are five top differences that you absolutely need to know when making a decision about which one to use: