What is the difference between an estate and a trust?

An estate and a trust are two different ways to organize an individual’s assets. In Oregon, an estate is all of the assets owned by a person that have not been specifically put in a trust. These assets are usually distributed to the heirs of the person’s estate after their death, according to the laws of the state. On the other hand, a trust is a legal document that is created to manage the assets of an individual for the benefit of someone else. A trust can be created while the individual is still alive or after their death. The trust document outlines the specific wishes of the individual, such as who the assets should go to, and when the assets can be distributed. In contrast to an estate, a trust allows an individual to have more control over how and when their assets are distributed after their death. With a trust, the individual can stipulate that the assets be used for specific purposes, such as education, healthcare, or charitable causes. Trusts can also function as an estate-planning tool, allowing an individual to avoid probate. This means that a trust can be used to bypass the court system and distribute the assets of an individual directly to their beneficiaries. Overall, an estate is the sum of all assets owned by an individual while a trust is a legal document that outlines the specific wishes of an individual when it comes to the distribution of their assets. Both can be used for estate planning purposes, but a trust can provide more control over how assets are distributed.

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