What is the difference between a trust and a guardianship?
A trust and a guardianship are two legal arrangements that are used for different purposes in Massachusetts inheritance law. A trust is an arrangement where a person, called the settlor, transfers property to another person, called the trustee, who manages the trust for the benefit of a third person, called the beneficiary. The trustee has a legal obligation to manage the trust’s assets and use them for the benefit of the beneficiary. A trust can be set up either during a person’s lifetime or through their will for after they pass away. A guardianship, on the other hand, is an arrangement where a court appoints a person to manage the assets and affairs of a minor child, an incapacitated person, or a minor or incapacitated adult. The guardian is responsible for making decisions on behalf of the person in their care, such as managing their finances and making decisions about their living arrangements. Unlike with a trust, a guardian is not obligated to use the assets for the benefit of the person in their care—they must simply manage them responsibly. Overall, while trusts and guardianships are both commonly used to manage property and assets in Massachusetts, they are very different. A trust is generally set up with a specific purpose or beneficiary in mind, while a guardianship is an arrangement that is created by a court when a person requires assistance with managing their affairs due to their age or incapacity.
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