Trust

A trust is a legal and fiduciary relationship in which one party, called the trustor or grantor (also known as the settlor in some jurisdictions), transfers property or assets to another party, the trustee, who holds and manages those assets for the benefit of a third party, the beneficiary.

Key aspects of a trust include:

• The trustee holds legal title to the trust property and has a fiduciary duty to manage it responsibly and in the best interest of the beneficiary or beneficiaries.
• The beneficiary is the equitable owner who benefits from the trust assets, either during the trustor’s lifetime or after their death.
• Trusts can be created during the trustor’s lifetime (inter vivos or living trusts) or established by a will after death (testamentary trusts).
• Trusts are governed by the terms set out in a trust agreement or deed, which specify how and when assets are to be managed and distributed.
• Trusts can serve many purposes, such as avoiding probate, reducing estate taxes, protecting assets from creditors, providing for minors or special needs beneficiaries, and maintaining privacy.

In essence, a trust is a versatile legal tool that allows a person to control how their assets are handled and passed on, either during their life or after death, by appointing a trustee to manage those assets for designated beneficiaries.