What is the difference between a will and trusts for estate planning?

A will is a legal document that outlines how a person's assets will be distributed after their death. It typically names an executor to manage the distribution of assets, and guardians for any minor children. A will only goes into effect after the person's death and must go through probate court before assets are distributed. During this court process, your last will and testament is legally approved and executed.

A trust is also a legal document that outlines how a person's assets will be managed and distributed. Trusts are financial vehicles created by a “trustor” to legally hold assets for a beneficiary known as a “trustee”. However, a trust can be set up to go into effect during a person's lifetime, and can be used for a variety of purposes such as minimizing taxes, protecting assets from creditors, and managing assets for beneficiaries who may be unable to manage them themselves. Trusts can also avoid probate court, which can be a time-consuming and costly process.

In summary, a will is a document that outlines how assets will be distributed after death and goes through probate court. A trust is a document that can be used to manage and distribute assets while a person is alive and can potentially avoid probate court.

Last updated: January 13, 2023