Are Living Trusts and Living Wills important and who should have them?

Very important additions to your Estate Plan are Living Wills and Trusts. Here we look at what these agreements are and why you should consider including them in your Estate Plan, sooner rather than later.

What is a Living Will?

A Living Will is a legally binding document, in England and Wales, that contains details of any medical treatments you don’t want to have in the future. A Living Will is made to state your wishes, in regard to medical decisions, should you be unable to make or communicate decisions for yourself.

The Living Will often contains two elements; an Advance Decision which states your wishes of the treatment you refuse to have, and an Advance Statement which details your preferences and wishes, when it comes to your medical care.

A Living Will is legally binding, and if a healthcare professional were to ignore or go against your wishes within the Will, they could be taken to court.

You do not, however, need to have both an Advance Decision and an Advance Statement within your Living Will. They can be linked together, or they could be made separately, depending on your wishes.

What is an Advance Decision?

An Advance Decision is applied at a time when you may be unable to make decisions or participate in decisions for yourself. This could be following a stroke, dementia, or towards the end of your life when speech and decision making is no longer possible.

This legally binding decision includes the treatments you are refusing to have, and the circumstances under which this situation would occur, for example when you are at end of life.

What is an Advance Statement?

An Advance Statement is not legally binding. This statement contains details of your wishes and preferences for your care when you are incapacitated, unable to speak for yourself, or when you are reaching end of life. It can also contain information on your beliefs and your values and can provide helpful guidance and support for those caring for you, when you can no longer speak for yourself.

What is a Living Trust?

A Living Trust, like a Living Will, is an agreement that is effective and applied when you are alive. Unlike a Living Will, which focusses on medical and care decisions and your preferences, a Living Trust sets out your wishes for your assets and your heirs.

The type of assets which can be included in a Living Trust are property, and savings and investments, and within the Living Trust you will name Trustees who control all the assets listed in your Living Trust, on your behalf.

What are the benefits of having a Living Trust?

You do not have to wait until you die for a Living Trust to become effective. You can gain assistance from the named Trustees, within the Trust, whilst you are alive, and this will see your beneficiaries benefitting from your Trust, during your lifetime.

A major benefit of a Living Trust is that you can decide the time your beneficiaries receive your assets, and you can make sure that it is a time that’s right for you, and for them. In addition, you can decide what your Trustees can and cannot do within the Trust. For example, your Trust may become effective should you become incapacitated, or when you reach a certain age. 

Another benefit is that should your partner marry, or even co-habit with someone else after your death, your assets for your children will be protected, within your Trust.

Following your death, a Living Trust bypasses the time-consuming process of probate and assets can be managed without the need to wait.

With a Living Trust you have complete control, and it is legally binding.

Which should you choose? A Living Will or a Living Trust?

The first thing to consider, is that it is important to start looking at estate planning earlier in life than you may think. A Living Will and a Living Trust, ensure that your wishes, your preferences, and your assets are considered, and that you have control over your life, at a time when you may not be able to communicate these wishes to others.

By making an estate plan now, rather than later, will save you time and money, and by doing this now you will be clearly stating your wishes, for your loved ones, and you are providing them with guidance at a time when they will need it. This can help them avoid potential financial hardship and difficult decisions they may need to make on your behalf, if a Living Will and a Living Trust are not in place, should the worse happen.