Last Will vs. Living Will: What’s the Difference and do You Need Both?
Perhaps the most fundamental document in the estate planning world is the Last Will and Testament. With the earliest reference to a written will, according to Greek philosopher Plutarch, being a document created by the Athenian statesman, lawmaker and poet, Solon over 500 years before Plutarch's time, means the concept of a written will has been in existence for over 2,500 years. Originally intended as a way to dispose of one’s estate after their passing, the written will has evolved from simply directing who is to receive an inheritance, to how one is to receive an inheritance and beyond.
Over these many years, written wills have been known by many different names and have performed different functions. Today, the most common types of wills we hear brought up are the Last Will and the Living Will. Although they may sound the same, they do perform different functions. However, before we discuss the differences between the two, here is a brief introduction to the basics of a written will.
Wills 101
When most people hear of a will, they typically conjure up an image of a “reading of the will” scene in a Hollywood movie – the lawyer for the deceased gathers up the family in either their office or the family home and reads the will telling everyone, in essence, who gets what and family drama ensues. While this is dramatic for films and tv, in the real world, a written notice and a copy of the will (or trust) is mailed to the interested parties via certified mail. Exceedingly less dramatic unless the will itself contains a bombshell revelation.
However, what a will does today is provides a written instruction who one’s heirs are and how much they are to receive. The writer of the will is known as the testator; recipient under the will is a beneficiary; and the party nominated to oversee the collection and distribution of assets is the executor. The executor, typically under a probate court approval and oversight, consolidates the decedent’s assets, pays final debts and expenses, and distributed the estate according to the will’s instructions. The executor’s appointment is subject to court approval, but a written instruction does carry great weight with the judge such that it takes extraordinary circumstances for a judge to not follow the will’s nomination.
Additionally, a written will may also nominate the decedent’s choice of a guardian for their minor children. As with the executor nomination, this selection is subject to a court’s approval, but having a written instruction does carry great weight with the judge. Finally, keep in mind that while there is more to the process, those are topics worthy of their own discussions.
Last Will
Everything discussed above encompass what a Last Will is and does. In fact, last will is often used as shorthand for a Last Will and Testament – a written outline of who your heirs are and what they are to receive and nominating a manager to oversee the process (the executor) and nominating a guardian(s) for any minor children.
Living Will
A living will, however, is a more antiquated term and refers to some specific powers and instructions made by the writer of the will. A living will is a written legal document outlining one’s healthcare preferences and typically only goes into effect upon one’s incapacity. This covers matters such as breathing and feeding tubes, blood transfusions, dialysis, medication preferences, organ donation, CPR, etc.
However, modernly, these decisions are addressed in one’s Advance Health Care Directive, commonly referred to as a Health Care Power of Attorney, that is updated as laws regarding medical care and privacy are updated such as with the adoption of the Health Insurance Portability and Accountability Act (HIPAA) in 1996. Under an Advance Health Care Directive, the writer (I.e., the one making the directives) is called the principle and the person authorized to act under the document is the agent. Additionally, an Advance Health Care Directive can also nominate a conservator for one’s medical decisions should one be required.
Do You Need Both?
When our clients ask whether they need both a Last Will and a Living Will, our answer is almost certainly, yes. Firstly, it should be clear that a Last Will and Testament is a different document than an Advance Health Care Directive (previously known as a living will). They perform different functions; each have different requirements for execution to be effective and each go into effect at different times. However, both documents are crucial parts of one’s complete estate plan and operate to sure up one’s estate to cover any potential situations that may happen in life. Typically, these documents are grouped with a Financial Power of Attorney and a Living Trust to round out one’s estate plan.
To summarize, when you hear or see Last Will, think Last Will and Testament and know this is a document directing who your heirs are, what they are to receive, who you pick to oversee the process, and, if applicable, who you wish for a court to appoint as the guardian of your minor children. When you hear or see Living Will, think Advance Health Care Directive or a Health Care Power of Attorney, and know this is a document making your medical wishes known ahead of incapacity, who you authorize to make the decisions and, if applicable, who you wish for a court to appoint as your conservator for your medical affairs.
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Additional Reading:
Never Leave Your Estranged Child a $1 Inheritance! https://youtu.be/LabpZbHLI0A
