Wills and Living Wills
Wills and Living Wills are key parts of any good estate plan. However,
though the two sound similar they serve very different purposes. A
Living Will states your choices for the kind of medical care you want to
receive if you become sick or injured and are unable to talk. A Last
Will and Testament, often referred to as just a Will, deals with your
property and how you want it distributed if you should die. Therefore, a
will is only effective after you die and a living will is only
effective before you die and when you incapacitated.
Advance Directive vs Advanced Directive
A Living Will is a type of advance directive. All advance directives are
documents a person creates that state what his or her choices are in
the event he or she becomes incapacitated or otherwise unable to
communicate with other people. Advance directives, such as Living Wills
or health care powers of attorney, typically address financial or
medical situations and can state specific choices as well as nominate
someone else to make decisions on the incapacitated person's behalf.
These documents are referred to as "advance" directives because you make
them in advance or in preparation for the possibility that you become
incapacitated. Some people mistakenly use the term "advanced" directive,
implying that the documents are somehow more complicated or important
than others. This is not true, and anyone can make advance directives
fairly easily as long as they ensure the documents comply with state
law.
Probate Estate vs Trust Estate vs Taxable Estate
An estate is a general term used to describe an area or amount of
property. It is sometimes used when referring to assets that are part of
the probate estate at someone's death, or assets that are not payable
to another person at the owner's death or not part of a trust estate. If
an asset is part of a trust estate, then generally the asset will not
be part of the probate estate. Further, when considering the taxable
estate of an individual for estate tax purposes the IRS will consider
the gross estate of the decedent to include the value at the time of his
death of all property, real or personal, tangible or intangible,
wherever situated. If property is part of a trust estate, it may or may
not be part of the gross estate for federal estate tax purposes
depending on certain facts about the trust.
Medicare vs Medicaid
Medicare is a federal program attached to Social Security. It is
available to all U.S. citizens 65 years of age or older and it also
covers people with certain disabilities. It is available regardless of
income.
Medicaid is a joint federal and state program that helps low-income
individuals and families pay for the costs associated with medical and
long-term custodial care. Unlike Medicare, Medicaid has strict
eligibility requirements.
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