What is the difference between a trust and a guardianship?

A trust and a guardianship are two distinct legal concepts that pertain to the management of a person’s estate or assets upon their death or incapacitation. A trust is a legal entity created by a person or company to manage assets over a period of time. The assets are held by the trust for the benefit of one or more parties. The person or company who establishes the trust (known as the “trustor”) appoints a trustee, who is a fiduciary responsible for managing the trust according to the terms of the trust agreement, which sets out the trustor’s instructions. The trustor can also appoint one or more beneficiaries to whom the trust will eventually pay out the assets. A guardianship, on the other hand, is a legal court proceeding in which a person (the “guardian”) is appointed by the court to manage the estate or financial affairs of another person (the “ward”) who is incapacitated or is otherwise unable to manage their own affairs. In a guardianship, the guardian has a legal obligation to act in the ward’s best interests. Unlike a trust, a guardianship does not provide for a distribution of assets upon the ward’s death. Instead, the guardian is responsible for managing the ward’s assets during the period of guardianship. In conclusion, a trust is a legal entity created to manage assets for the benefit of one or more parties, while a guardianship is a court proceeding in which a guardian is appointed to manage the estate or financial affairs of another person.

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