Trust

A trust is a legal arrangement in which one party, known as the settlor, grantor, or trustor, transfers legal ownership of assets to another party, the trustee, for the benefit of one or more beneficiaries. Trusts are established through a written document, often called a trust agreement, which specifies the terms and conditions of the trust’s operation. 

The trustee is responsible for managing the trust assets according to the terms outlined in the trust document, and has a fiduciary obligation to act in good faith and in the best interests of the beneficiaries. 

The assets that are transferred into a trust can include real estate, investments, bank accounts, business interests, personal property, and more. The trust document specifies who the beneficiaries are, when they will receive trust assets, and any conditions that must be met for distribution to occur. 

There are many types of trusts that can be tailored to meet the specific needs and goals of the grantor and the beneficiaries. 

Trusts are often used in estate planning to facilitate the efficient transfer of assets to beneficiaries according to the grantor’s wishes. The benefits of establishing a trust can include: 

• Asset protection: Assets held in a trust can be shielded from creditors, lawsuits, and probate. 
• Tax planning: Some types of trusts can be used to mitigate estate and income assets. 
• Providing for beneficiaries: Trusts can be used to ensure beneficiaries’ needs are met over extended periods of time. For example, beneficiaries with special needs can benefit from assets held in special needs trusts (SNTs) without jeopardizing their eligibility for government assistance programs or benefits.