One main difference between a will and a trust is that a trust takes effect as soon as it is created while the will takes effect after the person dies. Also, a trust can be used to distribute property before death while a will distributes property at the time of death or later.
Creating a will gives a person, upon death, sole discretion over the distribution of their assets to ensure their final wishes are carried out like they intended. A will includes those who are inheriting the assets called the beneficiaries, and also who the descendant choses as the person that will manage and distribute the assets called the executor. Wills also can cover specific funeral arrangements. An important reason to create a will is that a will allows a person to choose a guardian to raise the descendant’s children while they are still minors. A will can also list the instructions for care of pets as well.
Unlike a will, a trust can take affect and distribute property before death, at death, or after death. Trusts requires a transfer of property. A trust includes a grantor, a trustee, and one or more beneficiaries. The grantor is the person who creates the trust while a trustee is the one who holds the assets on behalf of the beneficiaries. The beneficiaries are people who will benefit from the trust and receive the assets. Like a will, it can specify exactly how a person’s assets would be dispersed between the beneficiaries. Some trusts are irrevocable and require the person to give up control of their assets during their lifetime. Other trusts are revocable and allows the person to make changes to the trust at any time and keep control over their assets.
Unlike probate that becomes documented as a public record, a trust allows assets to pass outside of probate so the assets remain private. The probate process for a will can last up to several months before assets are distributed to the beneficiaries. The most common reason people choose to have a trust is that a trust can save time, court fees, and reduce estate taxes because trusts can pass outside of probate. Since trusts usually avoid probate, beneficiaries can gain access to these assets quicker than assets that are transferred using a will.
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