In my estate planning practice, as well as during the seminars that I give, I regularly speak to clients who are unsure of the distinction between a Will, also known as a last will and testament, and a living will. I have even had one client who had told me that she had a Will, when in reality all she had was a living will. The difference between the two is vast, and not knowing the difference could have cost my client tens of thousands of dollars.
The purpose of a Will is to distribute your assets after you pass. If you have ever seen a movie with a lawyer reading a document to the family of a rich uncle who died, the lawyer is reading from this type of a will. A Will allows you to decide what you would like to go to whom, when, and how.
Without a Will, State law will determine who inherits your assets and handles your estate. A Will, as well as a living trust, allows you to structure the asset distribution to help avoid estate taxes, protect your heirs from creditors, and space out the distribution over time.
Family heirlooms can be expressly left to a beneficiary in a will to avoid fights. Only a Will can also be used to nominate guardians for your minor children if both of their parents pass away, although the court still has final discretion. A Will also allows the testator (person making the Will) to appoint executor(s) who will oversee the administration of the estate.
It is important to know that, unlike a living will, the last will and testament only takes effect after you die and can be changed, or revoked, any time prior to your death. To have any effect, your Will must be probated in the Surrogate's Court where you last resided after you die.
The purpose of a living will is to memorialize your health care wishes so that your family, doctors, and/or health care proxy (the person making your health care decision) know what you want done if you are not able to make decisions for yourself.
You are able to specify whether you would like to be kept alive by artificial means if there is no hope of recovery. You are also able to specify the level of care that you want to receive if you are in an accident or a coma.
A living will, although not officially authorized by New York State law, is enforceable as long as it provides clear and convincing evidence of your desires. Since it is hard to draft instructions for all the different possibilities which may arise, I generally advise clients to also prepare a health care proxy which appoints a trusted person to make decisions on your behalf.
The health care proxy should be given a copy of your living will so that they can use it as a guide as they make decisions. For individuals who wish to have decisions made according to the laws of their religion, such as organ donation and cremation, it is important to appoint a proxy who is sensitive to those wishes and to specify those wishes in the living will.
Similar to a power of attorney, which is used by your agent for financial and business transactions, a living will ceases to be effective after you pass away. Additionally, a person may also have a form which designates an agent to carry out his burial wishes. Such a designation, which is sanctioned by NY Public Health Law, is superior to instructions in a Will which take time to access.
Both a Will and a living will are important pieces of any estate plan. Each should be prepared under the guidance of an attorney and both need to be witnessed by two disinterested witnesses. That is where the similarities end. It is important for clients to understand that while a living will deals with health care decisions, a Will deals with distribution of property and the appointment of guardians and fiduciaries.