At Kayne Anderson Rudnick we understand that building and preserving your wealth is paramount. Equally important is ensuring that your legacy and wishes are honored, regardless of life’s uncertainties. Estate planning is a cornerstone of comprehensive financial security, yet it often comes with its own set of complexities and commonly misunderstood terms. Among these, the ‘Last Will and Testament’ and the ‘Living Will’ are frequently confused. While both are crucial components of a robust estate plan, they serve distinctly different purposes. In this article, we’ll demystify these two vital documents, clarifying when and how each one protects your interests and provides peace of mind for you and your loved ones.

What Is a Living Will?

A Living Will, also known as an advance directive, is a legal document that articulates your desires regarding medical treatment and healthcare decisions should you become incapacitated and unable to communicate your wishes. It provides clear instructions to medical professionals and your loved ones about the types of life-sustaining treatment you would or would not want, such as artificial respiration, feeding tubes, or resuscitation, ensuring your values and preferences guide your care in critical health situations.

What Is a Last Will and Testament?

A Last Will and Testament is a legal document that expresses your final wishes concerning the distribution of your assets and property after your death. It specifies who will inherit your real estate, financial accounts, and personal belongings. Additionally, it allows you to designate guardians for any minor children or dependents and to name an executor (personal representative) responsible for managing your estate, paying debts, and carrying out your instructions as outlined in the will.

Comparing a Living Will vs. Last Will and Testament

To help clarify these distinctions at a glance, the following chart outlines the key characteristics and applications of each document.

How Do Trusts Differ?

While not the same as a Last Will and Testament, many comprehensive estate plans also incorporate Trusts. A trust is a separate legal arrangement that allows you to transfer assets to a trustee for the benefit of beneficiaries, potentially offering benefits like probate avoidance and privacy, and can facilitate asset transfer during your lifetime.

Do You Need Both a Last Will and a Living Will?

A solid estate plan should include both a living will and a last will and testament. They each serve different purposes and are complementary rather than interchangeable documents.

Estate Planning with KAR

A living will and last will and testament are critical components of estate planning and help ensure your wishes are carried out seamlessly in the event of either a healthcare crisis or your death. At KAR, we can help you build an estate plan to organize your financial affairs, protect your loved ones, and minimize potential tax burdens on your heirs. We can work with your estate attorney to structure your affairs through a last will and testament, trusts, beneficiary designations, and other strategies for preserving and distributing your assets and caring for your loved ones.

Contact our estate planning and wealth advisor team at KAR today.