What is the difference between a trust and a guardianship?
Trusts and guardianships are two different estate planning tools used in Hawaii. Trusts allow an individual (the trustor) to designate someone (the trustee) to hold and manage their assets for the benefit of a third party (the beneficiary). The trustor can specify how and when the trustee can distribute the assets, and they can also set limits on how the trustee can manage them. In contrast, a guardianship is a legal arrangement where an adult (the guardian) is appointed to care for and manage a minor child’s assets. In this case, the guardian is usually a parent or other close family member. The guardian is responsible for overseeing how the minor’s assets are managed and ensuring that they are used in the best interest of the minor. The primary difference between a trust and a guardianship is that trusts are created to manage assets of an individual, while guardianships are created to manage assets of a minor. Another main difference is that a trustee has a fiduciary obligation to manage the trust assets according to the trustor’s instructions, while a guardian has a much broader role of managing the minor’s assets in accordance with Hawaii laws.
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