Let's discuss the difference between a will and a trust, including a trust fund. Many people search for and seek information on this topic because they often associate it with the concept of a trust fund child. This refers to individuals whose parents were extremely wealthy and left them a trust fund or assets that would provide income and future assets throughout their lifetime.
A will is a legal document that you can prepare to express your wishes regarding your assets after you pass away. It also designates an executor who is responsible for carrying out those wishes. In my will, for example, I have appointed an executor and specified how I want my assets to be distributed to my children and to charity. If my children are under 18, I can also establish a trust within the will. This means that any assets I have accumulated will be placed in a trust for their benefit. It's a wise move to ensure that an executor or asset manager oversees and manages these assets on behalf of my children. The goal is to prevent them from spending the wealth recklessly and ensure that the assets I have built over my lifetime remain with them.
In essence, a will outlines the directions for the distribution of assets after death, while a trust serves as a structure or agreement to name the children as beneficiaries and appoint someone to manage and distribute those assets throughout their lifetime. In the case of a trust or trust fund, there may be a specific age or milestone when the children gain access to the funds. For example, they may receive full access at age 25 or 30. Until then, the executor manages the distribution of the assets.
So, to summarize, a will is a legal document that determines how your assets should be handled, while a trust fund refers to an arrangement outlined in the will to provide assets to the next generation or other designated beneficiaries.
Take control of your legacy and protect your loved ones by familiarizing yourself with the intricacies of wills and trusts. Consult with our experts to tailor a personalized strategy that safeguards your assets and ensures your intentions are fulfilled. Secure the future of your family today!