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What’s the Difference Between a Will, Trust, and Living Will?

Arizona Estate Attorney Explains Differences, Pros and Cons

estate planning attorneyPlanning for your future and your family's future can be very complicated. Part of that has to do with the overwhelming number of options available to individuals. That's why it's important to understand some of the most common options available to you.

Such options fall under the broad category known as estate planning, a legal term used to describe how someone distributes their financial assets and other important decisions, either during their lifetime or after their death.

Having a strong estate plan can help protect your assets for yourself and your family. That's why it's critical that you speak with an attorney who fully understates the estate planning laws in your state since many estate planning laws vary from one state to another.

In Arizona, the estate attorneys at Brown & Jensen can thoroughly explain all the options available to you. We have extensive experience helping people create estate plans or represent them in court, especially in probate matters. That's why we created this guide explaining some of the most common estate planning methods, which include:

  • Will
  • Trust
  • Living Will

What Is A Will?

Formally called a Last Will and Testament, a written will can state how you want to distribute your financial assets after your death. In your will, you can also designate who will manage your affairs after your death.

  • Advantages of Creating a Will
    • You can clearly state who you want to inherit specific assets.
    • Creating a will can often be inexpensive.
    • You can change and amend your will during your lifetime.
  • Concerns to be Aware of
    • Your will could be challenged after your death.
    • Your heirs might still have to go through probate, the legal process to establish the validity of a will.
    • Your will is a public record once it has been filed for probate.

What Is A Trust?

A trust is a financial entity you create which protects your financial assets for your beneficiaries, the people who inherit your financial assets as outlined in your will or other estate planning documents. A trust is managed by a trustee. You can create a trust during your lifetime or upon your death. A trust created during your lifetime is known as a "living trust."

  • Advantages of Creating a Trust
    • Often more efficient than a will alone.
    • May be able to avoid many estate taxes.
    • Often gives you more control over when and how your beneficiaries receive your assets. For example, your trust can state that the money can only be used to pay for a loved one's education.
  • Concerns to be Aware of
    • Often more complicated to create than a will.
    • May require you to manage your assets more during your lifetime.
    • Certain trusts cannot be revoked once created.

What Is A Living Will?

A living will only concerns your wishes for your medical care if you somehow become unable to make such decisions in the future. You could be in a coma, suffer a severe Traumatic Brain Injury (TBI) or be permanently incapacitated. A living will does not involve the distribution of your financial assets.

  • Advantages of a Living Will
    • Your wishes will be clearly stated so there's doubt if you cannot speak for yourself.
    • You can change your living will at any time if you are deemed able to make such decisions.
    • Your loved ones will clearly know what your wishes are in the event that you cannot make such decisions for yourself.
  • Concerns to be Aware of
    • A living will often does not cover all possible medical situations.
    • There can sometimes be confusion regarding what your wishes are as outlined in your living will.
    • Your wishes in your living will might not be carried out if your loved ones or medical professionals do not have access to your living will or even know that one exists.

Understand Your Options

You worked to build your legacy for your family and other loved ones. Make sure your wishes are carried out according to your plan. Make sure you understand all the options available to you. Contact our law firm and schedule an appointment with an Arizona estate planning lawyer. We're here to help you make sure everything goes according to plan.

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