Insight

What's The Difference Between Estates and Trusts?

What is the difference between an estate and a trust? Read below to learn more about estates and trusts, including what sets them apart from each other.

Animated figure stands confused on arrow pointing two ways
Best Lawyers

Best Lawyers

December 8, 2023 02:43 PM

Trusts and estates are both important concepts in terms of protecting assets and leaving them to family members, nonprofits and other beneficiaries after your passing.

Despite their connections, trusts and estates are very distinct from each other. There are many differences between trusts and estates, from their basic definitions to their functions.

Making a direct estate vs. trust comparison is only possible with an understanding of both concepts. Keep reading to learn more about what trusts and estates are, as well as their roles in legacy planning.

What is an Estate?

An estate is a relatively simple concept, at least foundationally. Estates represent the total net worth of an individual, accounting for all assets held.

Cornell Law School’s Legal Information Institute defines an estate as “the total property, real and personal, owned by an individual prior to distribution through a trust or will.”

The distinction between real and personal property essentially refers to real estate versus all other assets. The category of real property includes land itself as well as buildings and other improvements made to that land. Examples of personal property include stocks, bonds, currency, art, vehicles and furniture.

Estates only include personally held real and personal property. In other words, mutually owned assets—such as a home owned with a spouse—are not included.

In terms of estate planning and financial planning specifically, estates refer to all property personally held by an individual before their death. In this context, an estate exists after a person’s death to contain and distribute those assets.

Smartasset explains that these assets can be distributed either through a will or, when a will is absent, based on state law and generally through the probate court process. After addressing relevant debts and expenses, assets in an estate will be shared through one of those two processes.

What is a Trust?

A trust can be viewed as an agreement to create a legal entity to manage and distribute assets.

Ownership of those assets moves from the original owner to the trust. The person or organization managing the trust takes on a fiduciary role, protecting the assets to the benefit of the beneficiaries. The trust sets conditions that must be met for the assets to eventually transfer from the trust to its beneficiaries.

There are three types of stakeholders involved in a trust:

  • The grantor. This is the person who places their assets into the trust.
  • The trustee. The trustee oversees the assets in the trust. They enter into the agreement knowing that they must manage those assets in the best interests of the beneficiaries.
  • The beneficiary or beneficiaries. Assuming the conditions of the trust are met, the beneficiaries receive the assets held in that trust.

As Investopedia explains, there are several types of trusts. Categories include revocable trusts (can be changed by the grantor while alive) and irrevocable trusts (difficult or impossible to change once established). A trust and estate attorney can help clients find the right options for their specific needs.

Establishing a trust allows the grantor and their beneficiaries to avoid probate court. Because the assets are held in a trust, they are no longer part of an individual’s estate.

Estate vs. Trust vs. Will

These basic definitions can help to contextualize the relationship between estates, trusts and wills.

An estate represents the assets directly held by an individual, excluding those in trusts or held with others.

Wills are legal documents that explain how an individual wants their assets distributed after their passing. Wills can help simplify the probate process and, in certain circumstances, avoid it entirely. However, many wills will need to go through probate.

Trusts are a distinct legal entity that holds assets provided by a grantor and managed by a trustee in the best interests of beneficiaries. When properly structured, trusts provide an alternative to the probate process in estate planning.

What’s the Difference Between an Estate and a Trust?

Estates and trusts play important roles in financial and legacy planning. However, they are not similar enough to be closely comparable.

Instead of considering these concepts from a “trust vs. estate" viewpoint, consider this. In legacy planning, an estate is made up of assets directly held by an individual when they pass away. A trust is a tool used to move ownership of assets and avoid the probate process that is common when someone passes away, whether they have a will or not.

Trust and estate attorneys can help clients navigate the complex legal landscape related to trusts, estates, wills and related concepts.

Find a lawyer now!

Headline Image: iStock/alashi

Related Articles

"Lawyer of the Year"


Lawyer in suit smiles for professional headshot

Kevin M. Levy

Technology Law

Miami, FL

2025

History Eraser


by Gregory Sirico

Penguin Random House and several other major book publishing houses filed litigation against Florida education leaders who recently passed a book ban law.

Penguin logo in front of black and white books

"Lawyer of the Year"


Man in suit and tie smiling for professional headshot

Dylan D. Rudolph

Litigation - ERISA

San Francisco, CA

2025

Scarlett Law Group: Mastering TBI Trial Law


by Justin Smulison

Randall H. Scarlett shares successes in traumatic brain injury cases, fueling Scarlett Law Group's growth across Northern California with specialized insights.

Two lawyers, suited, standing in front of law firm sign

"Lawyer of the Year"


Lawyer poses for professional firm headshot

Mindi M. Richter

Copyright Law

Tampa, FL

2025

One of the Greatest Ever...


by Justin Smulison

Steve Yerrid, a top catastrophic injury lawyer, has secured over 300 verdicts of $1M+ and has been recognized as "Lawyer of the Year" multiple times in Tampa.

Lawyer in blue suit poses in office for headshot

IN PARTNERSHIP

Georgia Car Accident: How to File a Car Accident Case


by Robert Hammers

In a car accident in Georgia? Read this guide for key steps from actions at the scene to settlement talks and lawsuit filing. Stay informed and prepared.

Figure with clipboard assesses the scene of an accident

"Lawyer of the Year"


Lawyer wearing glasses and suit smiles in headshot photo

Duane C. Pozza

Advertising Law

Washington, D.C., DC

2025

How a New Maryland Bike Safety Law Honors a Client’s Legacy


by Justin Smulison

Four-time Lawyer Of The Year Patrick Regan discusses how a client’s bicycling tragedy led to a result that improved Maryland traffic law to protect riders.

Group of lawyers posing for a photo

New SAFE Act Aims to Tackle Rising Crime in DC


by Gregory Sirico

As DC grapples with skyrocketing crime rates, the Secure Apartments for Everyone Regulation Amendment Act seeks to implement actionable change

Security cameras affixed to animated building

IN PARTNERSHIP

Three Steps To Maximizing Compensation After a Columbus Car Accident


by Jonathan Mani

Car accidents could result in costly medical bills and significant pain and suffering. To ensure you're compensated, contact a car accident attorney now.

Toy car laying upside down on pile of money

IN PARTNERSHIP

Immigration Pathways in the United States


by Versfeld & Hugo

Leon Versfeld knows firsthand how challenging obtaining a visa can be. Whether your path to residency involves investments, employment or athletic accolades, Versfeld & Hugo will guide you through every step.

Immigration Pathways in the United States

IN PARTNERSHIP

Bannister, Wyatt & Stalvey: Compassionate Service and Relentless Representation


by Bannister, Wyatt & Stalvey

The attorneys at Bannister, Wyatt & Stalvey, LLC are here to help you navigate your criminal case in South Carolina, specializing in DUIs, Criminal Sexual Conduct, Homicide and Expungement.

Bannister, Wyatt & Stalvey: Compassionate and Relentless

IN PARTNERSHIP

Steps To Take After an Encino Car Accident


by Andrew L. Shapiro

Hurt in a car accident that wasn’t your fault? You may be able to recover compensation. Call JUSTICENTER Personal Injury Lawyers for a free consultation today.

Two people talk after a car accident

IN PARTNERSHIP

What Is a Criminal Defense Attorney and When Do You Need One?


by Cody Cofer

A criminal defense attorney does everything legally necessary to help you get a favorable outcome for your charges, such as a dismissal. Learn more here.

Figure standing behind prison bars

IN PARTNERSHIP

What if I’m Partially at Fault for My Car Accident in Arizona?


by Triumph Curiel

Courts use comparative fault rules to deal with car accidents with more than one at-fault party. Read on to learn more.

Toy cars crashed into each other with plastic toy people looking on

Trending Articles

2025 Best Lawyers Awards Announced: Honoring Outstanding Legal Professionals Across the U.S.


by Jennifer Verta

Introducing the 31st edition of The Best Lawyers in America and the fifth edition of Best Lawyers: Ones to Watch in America.

Digital map of the United States illuminated by numerous bright lights

Unveiling the 2025 Best Lawyers Awards Canada: Celebrating Legal Excellence


by Jennifer Verta

Presenting the 19th edition of The Best Lawyers in Canada and the 4th edition of Best Lawyers: Ones to Watch in Canada.

Digital map of Canadathis on illuminated by numerous bright lights

Legal Distinction on Display: 15th Edition of The Best Lawyers in France™


by Best Lawyers

The industry’s best lawyers and firms working in France are revealed in the newly released, comprehensive the 15th Edition of The Best Lawyers in France™.

French flag in front of country's outline

Announcing the 13th Edition of Best Lawyers Rankings in the United Kingdom


by Best Lawyers

Best Lawyers is proud to announce the newest edition of legal rankings in the United Kingdom, marking the 13th consecutive edition of awards in the country.

British flag in front of country's outline

Announcing the 16th Edition of the Best Lawyers in Germany Rankings


by Best Lawyers

Best Lawyers announces the 16th edition of The Best Lawyers in Germany™, featuring a unique set of rankings that highlights Germany's top legal talent.

German flag in front of country's outline

Prop 36 California 2024: California’s Path to Stricter Sentencing and Criminal Justice Reform


by Jennifer Verta

Explore how Prop 36 could shape California's sentencing laws and justice reform.

Illustrated Hands Breaking Chains Against a Bright Red Background

Celebrating Excellence in Law: 11th Edition of Best Lawyers in Italy™


by Best Lawyers

Best Lawyers announces the 11th edition of The Best Lawyers in Italy™, which features an elite list of awards showcasing Italy's current legal talent.

Italian flag in front of country's outline

Combating Nuclear Verdicts: Empirically Supported Strategies to Deflate the Effects of Anchoring Bias


by Sloan L. Abernathy

Sometimes a verdict can be the difference between amicability and nuclear level developments. But what is anchoring bias and how can strategy combat this?

Lawyer speaking in courtroom with crowd and judge in the foreground

Tampa Appeals Court ‘Sends Clear Message,” Ensuring School Tax Referendum Stays on Ballot


by Gregory Sirico

Hillsborough County's tax referendum is back on the 2024 ballot, promising $177 million for schools and empowering residents to decide the future of education.

Graduation cap in air surrounded by pencils and money

Things to Do Before a Car Accident Happens to You


by Ellie Shaffer

In a car accident, certain things are beyond the point of no return, while some are well within an individual's control. Here's how to stay legally prepared.

Car dashcam recording street ahead

The Push and Pitfalls of New York’s Attempt to Expand Wrongful Death Recovery


by Elizabeth M. Midgley and V. Christopher Potenza

The New York State Legislature recently went about updating certain wrongful death provisions and how they can be carried out in the future. Here's the latest.

Red tape blocking off a section of street

Find the Best Lawyers for Your Needs


by Jennifer Verta

Discover how Best Lawyers simplifies the attorney search process.

A focused woman with dark hair wearing a green top and beige blazer, working on a tablet in a dimly

Key Developments and Trends in U.S. Commercial Litigation


by Justin Smulison

Whether it's multibillion-dollar water cleanliness verdicts or college athletes vying for the right to compensation, the state of litigation remains strong.

Basketball sits in front of stacks of money

Is Premises Liability the Same as Negligence?


by Jeremy Wilson and Taylor Rodney Marks

In today's age, we are always on the move, often inhabiting spaces we don't own. But what happens when someone else's property injures you or someone you know?

A pair of silhouetted legs falling down a hole with yellow background

Woman on a Mission


by Rebecca Blackwell

Baker Botts partner and intellectual property chair Christa Brown-Sanford discusses how she juggles work, personal life, being a mentor and leadership duties.

Woman in green dress crossing her arms and posing for headshot

Best Lawyers Celebrates Women in the Law: Ninth Edition


by Alliccia Odeyemi

Released in both print and digital form, Best Lawyers Ninth Edition of Women in the Law features stories of inspiring leadership and timely legal issues.

Lawyer in green dress stands with hands on table and cityscape in background