As a lawyer, I can explain the difference between a will and a trust. A will is a legal document that outlines how a person's assets and property will be distributed after their death. It is executed by the individual and must follow the required formalities of the jurisdiction in which it is executed.
In contrast, a trust is a legal arrangement where a person (the trustor) transfers assets and property to a trustee to manage the assets for the benefit of one or more beneficiaries. The trust agreement outlines the terms and conditions of this arrangement, and the trustee is responsible for distributing the assets in accordance with the trust agreement.
One primary difference between the two is that a will only becomes effective after the person's death, while a trust can take effect immediately or at any time during the individual's lifetime. A trust can also offer more flexibility and control over asset distribution than a will.
Another difference is that a will must go through probate, which is a court-supervised process that administers the will and distributes assets to beneficiaries. In contrast, a trust can avoid probate and allow for a more efficient transfer of assets to beneficiaries.
However, a trust can be more complex and costly to set up than a will. Additionally, certain assets, such as retirement accounts, may not be transferable to a trust and must be distributed through a will.
It is essential to consult with a licensed attorney to discuss whether a will or trust is the best option for your specific needs and circumstances. Additionally, it is crucial to regularly review and update these documents to reflect any changes in personal or financial circumstances.
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