What is the difference between an estate and a trust?

An estate and a trust are two different legal arrangements, often used in tandem, that deal with the ownership and management of assets. An estate is the total sum of a person’s assets, such as money, property, possessions, investments, and any debts owed. A trust, on the other hand, is a legal arrangement where a trustor (usually the person setting up the trust) transfers ownership of their assets to a trustee (who can be an individual, institution, or corporation) to hold and manage for the benefit of a third party (called the beneficiary). The trustor may also create trust documents that specify which assets will go into the trust and how the trustee is allowed to use or manage them. The main difference between an estate and a trust is that an estate is considered the assets of a living person while a trust is a legal arrangement set up in advance of death. In Minnesota, probate law dictates how the assets of an estate are managed and distributed. A trust, however, can circumvent the probate process by placing assets into a trust before a person dies. This allows the trustor to control how the assets are distributed after death without court intervention.

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What is the difference between an estate and a trust?

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