A trust holds property for beneficiaries for a specified or indefinite period, while an inheritance allows beneficiaries to take possession of property. A person can create and use a trust while alive, and can be the trustee and beneficiary. Trusts can be set up in countless ways for various purposes. An inheritance is passed on after death, either through a will or according to the law.
The difference between a trust and an estate is that a trust is a device that holds property or assets for the beneficiaries for a specified period of time, and in some cases for an indefinite period. Conversely, the beneficiaries of an inheritance can take actual possession and control of property or assets when they inherit. There are several other key differences between a trust and an estate. For example, a person can create and use a trust to transfer the benefits of property and assets while the person is alive. With an inheritance, the owner of the property and assets must die before the items can be inherited.
Another unique difference between a trust and an estate is that the person creating a trust can also be the trustee and beneficiary of the trust. This is not possible with an inheritance, because a person cannot inherit something that he already owns. Nor can a person inherit something when the person is dead. With a trust, a person can place their own property in a trust, maintain control of the property as trustee, and enjoy the benefits of the property in the trust. The person creating the trust must manage the property he or she placed in the trust in accordance with the trust instrument, which is a document that creates the trust and sets out how a trustee must manage the property in the trust.
A trust and an estate also differ because a person can set up a trust in countless ways. The only restriction is that the trusted instrument does not work for an illegal purpose. Lawyers often help set up a trust to avoid or minimize taxes, to ensure pets are cared for after a person dies, to protect assets, or to hold property until someone reaches a particular age, among many other things. reasons. Both a trust and an estate can provide benefits to other people, but the main distinction is how the benefits are passed on to those people.
With an inheritance, a person will simply hand over whatever property they own, and this happens when the person dies. The person can do this by making a will. Even if the person does not make a valid will, the property will still be passed on as an inheritance to someone or several people, in accordance with the law. Therefore, a trust and an estate have numerous differences.
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