(CTN News) – Trusts are fiduciary arrangements in which a third party, or trustee, holds assets on behalf of beneficiaries. In a trust, the beneficiaries will be able to specify how and when the assets will pass to them. Trusts can be structured in many different ways.
Your beneficiaries may be able to access these assets more quickly than they would if they were transferred through a will since trusts typically avoid probate. Also, if it’s an irrevocable trust, it won’t be considered part of your taxable estate, so there will be fewer taxes to pay.
Furthermore, assets in a trust may pass outside of probate, reducing estate taxes and saving time and court fees.
Other benefits of trusts include:
Ensure the safety of your assets;
- Protect your personal lifestyle from business risks;
- Providing for your dependents (e.g. for their education or if they have physical or other disabilities);
- Maintain continuity of ownership;
- Make sure you protect the assets you bring into a marriage or relationship;
- Long-term support for charities;
- Ensure your investment assets are protected and grown to enable them to be passed on to your loved ones; and,
- Limit the number of claims made against assets after death.
Trusts must be managed well in order to be effective. Trustee duties can be onerous, but they don’t have to be difficult. In spite of this, they can come in a variety of shapes and sizes, and professional advice is recommended.
For more information about trusts, see Viewpoints Is a trust right for you?
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