The field of estate planning contains many different legal instruments that most people have never heard of, so it can be kind of confusing when you start to do your research. On the other hand, there are some estate planning tools that are commonly used that most people have heard of that exist in some variations. As they say, a little bit of knowledge can sometimes lead to misconceptions, so we would like to clear up the difference between some of the basic terms that are often confused.
Everyone has heard of the last will, which is of course the most commonly used vehicle of asset transfer when a person dies. Many individuals are aware of the fact that there is an alternative to the will that prepares assets for eventual distribution while you are still alive. Since the last will is a vehicle of asset transfer, when some people hear the term "living will" they assume that this must be the way that you prepare assets for distribution while you are alive, but this is not the case.
A living trust is the vehicle of asset transfer that is executed while you are still alive. You can actually serve as both the trustee and the beneficiary while you are living so that you retain full control of the resources. But you name secondary beneficiaries and a successor trustee who will distribute the assets to your beneficiaries upon your death or incapacitation in accordance with your wishes.
The living will, on the other hand, is an advance health care directive. It is used to express your preferences with regard to the medical procedures you would accept and those that that you would prefer to deny in the event of your incapacitation. The matter of being kept alive through the utilization of life support systems is at the core of most living wills.
