This weekend, I was sitting on a porch swing with a glass of lemonade speaking with one of my really good friends. This is by the way, one of my favorite summertime activities. The air was warm, but not stifling. The fragrance of recent rain and fresh cut grass joined the distant sound of traffic and the closer sound of the next door neighbor’s children laughing. It was peaceful moment that lent itself to reflection. My friend, who we will call Rene, told me that she figured it was time to get a Will prepared. But she didn’t know where to even begin with the process. All she knew is there was a regular will and a living will. She didn’t know the difference and was hesitant to call a lawyer because she didn’t know enough to begin an intelligent conversation on the topic. She asked me if I knew anyone that could help. I looked at her for a moment, choosing my next words carefully. Then I simply said, “Yes, start the conversation with your insurance agent. She can help you develop a foundational understanding of your options.” Then it was her turn to sit silent for a moment before bursting into laughter. You see, I’m her agent 🙂
So we spoke for a few minutes about some of the differences between a will and a living will. Basically, I shared with her the terminology she was looking for was a Living Will and a Last Will and Testament. What I most wanted her to understand when considering a Living Will or Last Will and Testament is that these documents handle completely different issues and work better hand in hand and should not necessarily be considered an either/or situation. A Living Will deals exclusively with healthcare decisions while you are alive. A Last Will and Testament expresses your preferences after you have died. There were a few other major differences I asked her to note. First, is the time that each takes effect. A living will normally takes effect when you no longer have the mental capacity to make legal decisions for yourself either through disability such as Alzheimer’s or a coma, etc.
Also each document can be used to name an individual to make decisions on your behalf. In the case of a living will, this person is considered your healthcare agent who can make decisions about your medical treatment and in some cases, decide whether your body is donated to science or organs to needy recipients. In the case of a last will and testament, this person is considered the Executor of your estate who inventories your estate, pays your obligations, and distributes what is left to your beneficiaries. However, it is also important to note that, the Probate Court has the final say on who becomes the Executor of your estate, if you’ve chosen a Last Will and Testament. There are ways to garner more control, but we’ll talk about that later.
Rene sat up and was obviously a little curious at the tabled topic, but allowed me to continue. So, I shared with her that a Last Will and Testament can also be used to appoint a guardian for your minor children or disabled dependents. I also shared with her that it is important to know that directions expressed in a last will and testament can only be carried out in regards to any assets that remain after all debts have been paid. Assets held jointly or for which a beneficiary is named, such as bank accounts and life insurance, are not subject to probate and are not controlled by a will. These assets can however be controlled by a Trust account.
Rene looked comfortable for most of the conversation. She actively listened and asked probing questions here and there. She understood that as her Insurance and Estate Planning consultant I can’t offer legal advice, only enough information to help provide a foundational understanding and a place to begin with her questions for an attorney consultation. However, when I mentioned the word Trust account, she sat up and asked me, “Isn’t that for rich people?” I laughed and told her no. Under the right circumstances, it may be for her. But that’s a conversation for another glass of lemonade.
As we walked in the house, I couldn’t help but think to myself that it’s kind of cool to be a consultant on the things that matter for the people that matter most….it had been a great day 🙂