A will and a trust are both estate planning tools used to distribute assets after death, but they differ in several important ways.
A will is a legal document that allows an individual (the "testator") to specify how their assets will be distributed after they die. The will must comply with state law and typically goes through a probate court process, where a judge will oversee the distribution of assets according to the will's instructions.
A trust, on the other hand, is a legal arrangement where an individual (the "grantor") transfers assets to a trustee, who will manage and distribute the assets on behalf of beneficiaries named in the trust agreement. There are many different types of trusts, but they generally fall into two categories: revocable or irrevocable. Revocable trusts can be changed or terminated by the grantor, while irrevocable trusts cannot. Trusts are typically not subject to probate court, which can save time and money, and may provide privacy that a will does not.
Deciding which estate planning tool is best for you depends on your individual circumstances, including the size and complexity of your estate, your personal preferences, and tax consequences. For example, a trust may be a better option for those with large or complex estates, or those who wish to avoid probate court. However, trusts may also come with higher costs and administrative burdens.
It is important to consult with a licensed attorney who specializes in estate planning to determine which option is best suited for your needs. An attorney can review your individual circumstances, provide legal advice, and help draft the necessary documents.
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