Jerry Taylor breaks down wills and trusts. A will is post-death instructions that names guardians and goes through public probate. A trust holds assets during your lifetime, stays private, and skips probate, but you have to actually move your assets into it.
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. 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. A will has to go through probate court, which is a process where a judge, approves the distribution of the assets. Once a will is filed with the probate court, it then becomes a public document. A trust, on the other hand, is a completely private document, and the administration of the assets in a trust after you die avoids probate. You don't have to go to probate court, and it is done in private.
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