A will is a document that stipulates how your possessions and assets should distribute among beneficiaries after your death. A trust is a fiduciary arrangement that allows a trustee to manage and hold assets on behalf of beneficiaries.
While a will does not become effective until your death, a trust can help to manage your assets during your life as well.
Types of trusts
A revocable trust allows your assets to pass outside of probate after your death, but you retain control of those assets during your lifetime. You have the power to dissolve this type of trust at any time, for any reason, during your life. This type of trust is also known as a living trust. An irrevocable trust also allows your assets to pass outside of probate after your death, but once you establish the trust, you no longer have control or the authority to make changes. Most revocable trusts become irrevocable upon death.
Benefits of a trust
When possessions are in a trust, they pass directly to beneficiaries without going through probate, which is time-consuming and complicated. Keeping your assets and possessions in a trust also protects them from potential lawsuits or creditors. While a revocable trust is subject to estate taxes, an irrevocable trust generally is not.
When you execute the trust, you get to choose the trustee. You may choose a family member or friend that your trust. However, it is not necessary to choose a personal acquaintance. You may choose a professional corporate trustee instead.
