Last Will vs. Living Will vs. Power of Attorney

Picture of Kyle E. Wright
Kyle E. Wright
6/10/22 1:06 PM
Tags: Estate Planning

Many terms get thrown around when talking about estate planning. The average person might not know what all of them mean, especially when some sound quite similar. We hope to clarify that confusion in this article, starting with the differences between a living will, last will, and power of attorney.

Last Will (and Testament)

Let's start with the basics. You have probably at least heard of a will before, but there are actually multiple types of wills. Most people tend to think of the last will, which is a legal record that explains how an individual would like their assets distributed upon their death and whom the individual's responsibilities fall upon, such as new guardians for the individual's legal dependents. Beneficiaries are assigned assets you own, and the executor is responsible for carrying out your wishes. In contrast to a last will, as the name implies, a living will takes effect while you are still alive. Intestacy laws (state-specific) determine who receives your property and other assets if you die without a will. In Ohio, your spouse will inherit 100% of your assets unless you have children (or descendants of children) from a previous spouse. Suppose you have one child from a previous marriage. In that case, your current spouse will inherit the initial $20k of the estate and then split the remaining estate equally. If no spouse is living, then the children will divide it all. If no spouse or children are living, then the parents will inherit everything. If no parents, spouse, or children are living, then the siblings, or aunts, uncles, and grandparents will inherit and divide it all.

Living Will

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The purpose of a living will is to be a reference for your wishes regarding medical intervention, should you ever find yourself unable to express those wishes yourself. A living will can include whether you would like to be kept alive using a life support machine and how long. It is essentially what medical practices you approve of being used on you and which you do not. Living wills are a type of advanced directive, which are a type of legal document that contains your wishes. One consistent aspect of advanced directives is that they must be created while you are still of sound mind and body.

Power of Attorney

In the same manner as advanced directives, power of attorney is a legal document that allows your wishes to be expressed, even when you are physically unable to. Specifically, power of attorney grants an individual you named the legal authority to make decisions on your behalf. It does not have to give complete control either; it is well within your right to put limitations on power of attorney, such as having it only apply for a limited time frame or only for specific decisions on exact assets. Power of attorney can function similarly to an advanced directive if you grant it the power to make medical decisions on your behalf.

Estate planning is an important task for anyone, and it is vital to understand each individual part of it to do it correctly. However, it is not exclusively about preparing for the transfer of your assets. Making the proper preparations for your care and managing your assets while you are still alive but incapacitated is essential. After all, you never know when an unfortunate accident may happen, so it is best to prepare for the worst. That means you should be considering all forms of Estate Planning, not just one of these options.

Please talk with us here at Ruck & Wright to get started!

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Author: Kyle E. Wright     Published: 6/10/22 1:06 PM     Tags: Estate Planning


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