Bob Gauvreau breaks down wills and trusts. A will directs how your assets get distributed when you die and names an executor. A trust names beneficiaries and a trustee to manage assets over time, like holding money until a child turns 25 or 30.
Chapters
Okay, let's talk about the difference between a will and a trust or a trust fund, right? And I think a lot of people search this and look this information up because they think of, you know, a trust fund child. So someone whose parents were extremely wealthy and they were given a trust fund or some assets that were essentially providing income and future assets for them over their lifetime. So a will is really the legal document that you can prepare, right, you and me can prepare, that says, this is the direction I want for my assets when I die. It also puts someone in power for what happens with those assets. So that's called an executor. So inside my will, I have an executor, and it says, this is what I want to go to my kids. This is what I want to go to charity. And if my kids are under 18 and I want to put in place a trust for them, where my. Essentially any of the assets that I built up go into a trust for my kids, which is a great play. And an executor or an asset manager manages those assets for your kids so that they aren't spending it ridiculously, or the wealth that you've created over your lifetime can stay with them. Essentially, we want to protect them from themselves. That's where we have a trust in place and an active manager. So that is considered the trust fund. So the will is the direction that we want and what we want to happen with our assets after we die. And then the trust is essentially a structure put in place or an agreement put in place that says the kids are the beneficiary of those assets, but someone is going to manage the distribution of how that works over their lifetime. So sometimes with a trust or with a trust fund, we have kids who at a certain point, get access to all those funds. So sometimes people say, okay, once they're 25 or once they're 30, they can get access to everything. But until then, we want the executor to manage the distribution of those assets. So that's ultimately the difference between a will, which is that legal document saying this is how it should operate, versus a trust fund, which is essentially an arrangement outlined in the will, to provide your assets to the next generation or to whoever those beneficiaries are.
