What is the difference between a trust and a guardianship?
A trust and a guardianship are both legal terms that refer to methods of managing and protecting assets, but they affect different legal aspects and have very different legal implications. A trust is a legal arrangement in which one person or an entity is considered the trustee, and is responsible for managing assets or funds for the benefit of another person, called the beneficiary. A guardian is someone appointed by the court to manage the legal and financial affairs of a person—usually a minor or disabled adult—who can’t do so themselves. In North Carolina, the types of trusts that can be set up are determined by the applicable state law. Some trusts are created as a way to pass on assets after a person’s death, while other trusts are set up during a person’s lifetime to provide for their needs upon death. In these types of trusts, the trustee is responsible for managing the assets, and making decisions about how they are used to benefit the beneficiary. On the other hand, guardians have a much more limited role. A guardianship is a legal arrangement in which a court-appointed individual (the guardian) is responsible for protecting the interests of a minor or disabled adult. The guardian has legal authority to make decisions on behalf of the person they are appointed to represent, such as, deciding where they should live, managing their financial affairs, and even making medical decisions. In North Carolina, a guardianship for a minor ends when they turn 18.
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