A will and a trust are both estate planning tools, but they have different purposes and functions.
A will is a legal document that outlines how a person's assets will be distributed after their death. A will can also name an executor, who is responsible for managing the estate and carrying out the wishes of the deceased. A will only takes effect after a person's death, and it must go through probate in order to be legally valid. Probate is the legal process by which a court oversees the distribution of a person's assets according to their will.
A trust, on the other hand, is a legal entity that can hold and manage a person's assets while they are alive and after they die. A trust is created by a person called a grantor, who transfers their assets into the trust. The grantor can name themselves as the trustee, who manages the assets in the trust, or they can name someone else to act as trustee. When the grantor dies, the assets in the trust are distributed according to the terms of the trust document, without the need for probate.
The main difference between a will and a trust is that a will only takes effect after a person's death, while a trust can be used while a person is alive and after their death. Additionally, a will must go through probate, while a trust does not.
There are some limitations and exceptions to consider when using a trust. Creating a trust can be more complex and time-consuming than creating a will, and it may require ongoing management and administration. Additionally, a trust may not be necessary or beneficial for everyone, depending on their assets and estate planning goals. It is important to consult with a licensed attorney to determine whether a will, a trust, or another estate planning tool is the best option for your individual needs.
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