The main difference between a will and a trust lies in how they function and when they take effect.
A will is a legal document that outlines your wishes regarding the distribution of your assets after your death. It becomes effective upon your passing and goes through a legal process called probate, where your assets are managed and distributed according to your instructions. A will allows you to appoint an executor to oversee the distribution process and name guardians for minor children, if applicable.
On the other hand, a trust is a legal entity that holds and manages assets on behalf of beneficiaries. It can be created during your lifetime or through your will and can take effect immediately or upon your death, depending on the type of trust. With a trust, you transfer your assets into the trust, and they are managed by a trustee for the benefit of the designated beneficiaries. A trust can provide more flexibility and control over how your assets are managed and distributed, as it can bypass the probate process and may offer certain tax advantages.
In summary, a will is a document that becomes effective upon your death and outlines the distribution of your assets, while a trust is a legal entity that can be created during your lifetime or through your will, providing ongoing management and control over your assets for the benefit of designated beneficiaries. The choice between a will and a trust depends on your specific needs, goals, and the complexity of your estate. It’s recommended to consult with an attorney or estate planning professional to determine the best approach for your circumstances.
