Q: “What is the difference between a will and a trust?”
Before breaking down the main differences between wills and trusts it is important to understand that there are also similarities between the two documents. For example, both wills and trusts are estate planning tools that can help ensure that your assets are protected and successfully passed on to your designated heirs. It is also possible to have both of these documents in your estate planning strategy.
Now the difference:
A will is a legally enforceable document stating how you want your affairs to proceed and how you want your assets distributed after your death. In a will, you are most likely to find: a list of assets and debts, the contents of any safe deposit boxes, properties, vehicles, and family heirlooms. A will can be an extremely effective document when it comes to estate transfers, but it can come with its own setbacks. Estate wills become public records and anything left by a will must go through probate court.
Trusts on the other hand or just another method of transferring your estate to your beneficiaries. It is a fiduciary relationship where you give another party the authority to manage your assets for the benefit of those identified as your beneficiaries.
The key differences between the two are their state of activation. Wills become active upon the testator’s death, while trusts become active as soon as it is signed by the guarantor.