We have all heard of the term “legalese” and there are indeed a lot of arcane terms that are used in the legal profession. This is true in the specialty of estate planning as well. Though there are some that can be confusing not because they are lengthy but because they include words that perhaps have meanings different than those same words in our daily life.
For example, many Estate Plans include both a Living Trust and a Living Will. And many Estate PLans use a Last Will to state your wishes for distribution of assets upon death. Since the Last Will is a vehicle of asset transfer, there are those who assume that the Living Will is also used to transfer assets but the transfer must somehow take place while you are still alive.
This is understandable logic but in fact the Living Will does not transfer assets. It is used to state your medical preferences, usually centering around the issue of whether or not you would want to be kept alive though the use of artificial life support systems if you were in a terminal condition.
A Living Trust used is used to manage your assets while you are alive and transfer assets upon your death. You fund the trust and name yourself (or you and your spouse) as both the trustees (managers) and beneficiaries so you have total control of the assets while you are alive. But you also name a successor trustee who will administer the trust in the event of your incapacitation and provide distributions to your beneficiaries in accordance with your wishes after you pass away .