What’s the difference between a will and a trust?
A will and a trust are both estate planning documents that can be used to distribute assets to beneficiaries after the owner’s death, but they differ in some key ways.
A will is a legal document that outlines how a person’s assets should be distributed after their death. It can also name guardians for minor children and designate an executor to manage the distribution of assets. A will only goes into effect after the person’s death and must go through the probate process.
A trust, on the other hand, is a legal arrangement where a person (the grantor) transfers assets to a trustee to manage and distribute to beneficiaries according to the terms of the trust. A trust can be revocable, meaning the grantor can make changes to it during their lifetime, or irrevocable, meaning it cannot be changed once it is created. A trust can help avoid probate and provide more flexibility in distributing assets to beneficiaries. It can also provide benefits such as asset protection and tax advantages.
Overall, a will is a simpler and less expensive option for basic estate planning, while a trust can provide more benefits and flexibility for more complex situations. It’s important to consult with an estate planning attorney to determine the best option for your individual needs.
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