Jerry Taylor explains the key difference: a will is instructions that take effect after you die and name an executor and guardians, while a trust is a legal entity that holds and manages your assets while you're alive. A trust requires retitling assets into it to work.
So what is the difference between a will and a trust? A will is sort of like a set of directions that tells people where you want your assets to go when you die. Most wills typically appoint an executor who will act as the quarterback, if you will, of the plan to distribute their assets. A trust, on the other hand, is different. It's a legal tool, a legal entity, if you will, that's set up to actually hold assets. You can think of it sort of like a wagon. It's the, the trust is the wagon and you put all your assets into the wagon. When you've done that, you funded the trust and the trust holds those assets for someone's benefit. At the very least, you should have a will to direct where your assets will go. And also, if you have minor children, then you name the legal guardians for those children in the will. A will takes effect when you die. A trust, on the other hand, you use during your lifetime. You actually put your assets into it, retitle your assets in the name of the trust.
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