What is the difference between a will and a trust?

A will and a trust are both documents that are used to distribute a person’s assets after their death in accordance with their wishes, but the difference between the two lies in the way they are managed. A will is a document that is created by an individual while they are still alive, and it becomes legally binding after they pass away. In a will, a person can outline who their beneficiaries are and how they would like their assets to be divided between them upon their death. In order for a will to be legally binding, it must follow the laws implemented by the state of Texas and must be witnessed and notarized. A trust is a document that is created while the individual is still alive and is typically managed by a third party, such as a financial institution. A trust allows a person to set aside a portion of their assets to be managed and distributed by the trustee of the trust. The trust can be created to benefit an individual or an organization, and it can be structured in such a way that it will have specific tax advantages. So, while both documents are used to outline the wishes of an individual upon their death, a will is more direct and specific in how assets are distributed, while a trust can benefit the individual in other ways, such as affording them certain tax advantages. In order for either of these documents to be legally binding in the state of Texas, they must adhere to the laws enforced by the state.

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