Mention a last will and testament, and almost everyone knows what you’re talking about. But that isn’t the only type of will you need.
There are also living wills, which can serve as a “legal seatbelt,” according to Elijah Kovar, co-founder of Great Waters Financial in Minnetonka, Minnesota. “When you need your seatbelt, it’s too late to put it on,” he says. It’s the same with a living will: Every adult should have one in place long before it’s time to use it.
If you’ve never heard of a living will or aren’t sure whether you need one, here are some questions you may ask yourself:
— What is a living will?
— What’s the difference between a will, a living will and a living trust?
— Do I need a living will?
— How do I get a living will?
— How much does it cost to put together a living will?
— What should be included in a living will?
— Do I need anything else?
— Where should I put my living will?
What Is a Living Will?
A living will is a legal document that spells out your wishes for medical treatment should you become incapacitated for any reason.
“If you can’t speak for yourself, a living will allow your loved ones to speak on your behalf,” Kovar says.
They may also be called medical directives or advance health care directives, and these documents take effect once someone becomes unable to make their own decisions. For instance, a living will may be used if someone is unconscious, in surgery or suffering from a condition such as dementia.
Living wills often include provisions that stipulate the document doesn’t go into effect until two physicians determine a person is no longer able to participate in their health care decisions.
What’s the Difference Between a Will, a Living Will and a Living Trust?
There are several estate planning documents with similar names, but each serves a different function.
“The term ‘will’ may be confusing,” says Daniel Rubin, partner with law firm Farrell Fritz in New York City. “A living will has nothing to do with the distribution of your assets.”
That’s the job of a last will and testament. It dictates how a person’s financial assets and property are to be divided after their death.
A living will, meanwhile, is only concerned with medical decisions that are made while a person is alive. Once a person dies, the living will is no longer in effect.
A living trust is another way to pass assets to heirs. These documents might have an incapacity clause, but it typically only appoints someone to manage your money, not your health care.
“I’m always a big fan of the living trust,” says Eric W. Bond, wealth advisor and president of Bond Wealth Management in Long Beach, California. Living trusts allow heirs to avoid probate court and can be used to stipulate conditions for the distribution of assets.
Do I Need a Living Will?
Yes, according to some experts. “Every single person should have a living will — as soon as you turn 18,” Kovar says. Injury or illness can happen at any time so it’s important to be prepared.
However, there are other options for preparing for these events. “I don’t typically do living wills for people,” Rubin says. He prefers to use health care proxies instead.
A health care proxy is a person you select to make medical decisions should you become incapacitated. While a living will spell out exactly what you would like to have to happen in certain scenarios, a health care proxy — sometimes called a health care designee or health care power of attorney — is given the authority to make decisions as they see fit.
For this reason, it’s vital to choose a proxy carefully. For instance, a spouse may understand and implement your wishes, but a parent may be more inclined to try to keep a child alive at all costs, Rubin suggests.
Do I Need Anything Else?
Living wills often include provisions to designate a health care proxy or health care power of attorney. If yours does not, it may be wise to name one in a separate document. While the living will indicates your wishes, the health care proxy designates who will be responsible for carrying them out.
You may also need a separate do-not-resuscitate order if you don’t want lifesaving actions to be taken in the event your heart stops. As with a health care proxy, these orders may already be included within a living will.
Where Should I Put My Living Will?
After your living will and/or health care proxy documents have been completed, don’t simply store them in a desk drawer. Copies need to be given to your loved ones so they will have access to them in the event of an emergency. Some physician offices may also keep copies in their files if requested.
Beyond handing out the document, Bond recommends having a family meeting. “Not all kids get along,” he says. “Let’s be honest.”
Meeting with adult children or other family members in advance can help head off potential disagreements later about how care should proceed. Although not required, any family member called upon to serve as a health care proxy or power of attorney should be encouraged to provide regular updates on care decisions to others to avoid any misunderstandings or hard feelings.
Article courtesy of wtopnews