How do trusts differ from wills in transferring wealth?

• A. Wills direct post-death distributions; trusts manage assets during life and after death, offer control, tax planning, and probate avoidance
• B. Wills manage assets during life; trusts only post-death distributions
• C. Wills and trusts perform identical roles
• D. Trusts are only for charitable giving

Answer: (A)

A key distinction is that wills operate after death, directing how assets are distributed through the probate process, while trusts can hold and manage assets during life and continue to control distributions after death. A trust, especially a revocable living trust, lets you name a trustee, manage assets while you’re alive (and if you become incapacitated), and set conditions for how and when beneficiaries receive assets. When funded, a trust can also help avoid probate, keep affairs private, and facilitate tax planning. That combination of ongoing management, potential tax benefits, and probate avoidance is what makes this option the best-fit description of how trusts differ from wills. The other choices misstate roles—wills don’t manage assets during life, trusts aren’t only for post-death distributions, and trusts aren’t restricted to charitable use.