What are the differences between trusts and wills?

What are the differences between trusts and wills?

Trusts and wills are both estate planning tools, but they serve different purposes. A will outlines how your assets will be distributed after your death, while a trust can manage your assets during your lifetime and after your death.

Can you explain how a trust works?

Sure! A trust is a legal arrangement where one party holds assets for the benefit of another. The person who creates the trust is called the grantor, the person managing it is the trustee, and the beneficiaries are those who receive the benefits.

Are there any tax benefits to using a trust?

Yes, trusts can offer tax benefits, such as reducing estate taxes and providing income tax advantages, depending on the type of trust.

Which one is better for me, a trust or a will?

It depends on your individual circumstances. If you want to avoid probate and have more control over your assets, a trust might be better. If you have a straightforward estate, a will could suffice.