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Advice & More September 2017

Legal Ease

Is a Trust Still a Trust by any Other Name? Confusion Can Ensue

By Jonathan J. David

It can get a little confusing because these types of trusts go by many different names including revocable living trust, living trust, revocable trust and inter-vivos trust. Also, sometimes these types of trusts don’t use any of those names in the title other than the word “trust,” along with the name of the person who created it.

Dear Jonathan: A few years back I completed my estate planning. The documents I prepared included a living trust. I was talking to a friend of mine recently, who told me that she and her husband recently completed their estate planning and one of the documents they prepared was a trust, but it is called a revocable living trust. What is the difference between a revocable living trust and a living trust or are they the same? Could you please explain?

Jonathan Says: A revocable living trust and a living trust are the same thing. This is a type of trust that is created during your lifetime and which you can amend or revoke at any time, so long as you have the mental capacity to do so. It can get a little confusing because these types of trusts go by many different names including revocable living trust, living trust, revocable trust and inter-vivos trust. Also, sometimes these types of trusts don’t use any of those names in the title other than the word “trust,” along with the name of the person who created it, i.e., the “John Doe Trust dated January 1, 2017.”

 

Dear Jonathan: What is the difference between a revocable trust, an irrevocable trust and a testamentary trust?

Jonathan Says: A revocable trust is a trust created during a person’s lifetime which can be amended or revoked at any time, so long as the person has the mental capacity to do so.

An irrevocable trust is a trust that once created cannot be amended or revoked. This type of trust can be created and take effect, i.e., funded, during a person’s lifetime or it can be designed to take effect only upon a person’s death.

A testamentary trust is a type of irrevocable trust that is created in a person’s last will and testament and only takes effect upon the person’s death.

 

Dear Jonathan: Is a living will and last will and testament the same thing?

Jonathan Says: No. Although they both have the word “will” in their name, they are designed to address two totally different situations. A last will and testament is a document which sets forth who is to receive a person’s assets upon that person’s death. A living will is a document which sets forth what type of medical treatment a person wants to receive if he or she is either in a persistent vegetative state or an irreversible coma and is unable to communicate his or her wishes.

 

Dear Jonathan: I have both a living will and a DNR, but I can’t remember why. Don’t they do the same thing?

Jonathan Says: No. A living will is a document which sets forth what type of medical treatment you want to receive if you are either in a persistent vegetative state or an irreversible coma but unable to communicate your wishes. A DNR, which is the abbreviation for “Do Not Resuscitate,” is a document which states that you do not want to be resuscitated if you are in cardiac or respiratory failure, i.e., your heart or breathing stops. For example, if you are at home and suffer cardiac failure, the paramedics who arrive at your doorstep will automatically try to revive you. However, if you have a DNR and the paramedics are made aware of it, then they will not attempt to revive you. I hope this helps.

 

Jonathan J. David is a shareholder in the law firm of Foster, Swift, Collins & Smith, PC, 1700 East Beltline, N.E., Grand Rapids, Michigan 49525.

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