Estate planning terms can be confusing, especially when they sound similar to one another. From the names, you may think that a living will and a living trust relate to one another. Actually, they are two different things.
A living will and a living trust can each be important parts of your estate plan. However, they have little to do with one another apart from their names. U.S. News and World Report explains the differences between the two.
A living will can go by several other names, such as an advance directive. If you have strong feelings about the health care you do and do not want to receive if you become incapacitated, a living will informs your doctor of your wishes. The directions you give in your living will become part of your medical record, meaning that you will not receive any treatment that you do not want. You can tailor the directions in your living will to include certain treatments and exclude others, depending on your preferences.
A living trust is also called an inter vivos trust because it takes effect while you are still alive. During your life, you serve as the trustee and retain control of all the property it contains. However, you name a successor trustee, who takes control in the event of your death or incapacitation. One of the main benefits of a living trust is that it can shorten, or even eliminate, the probate process after you die.
A living trust pertains only to your property, while a living will pertains to your health care. They have very little, if anything, to do with one another, but they can each be valuable estate planning tools.