A trust is a legal relationship in which the assets are kept by one party in favor of another. Trusts refer to common law jurisdiction. A trustee is an individual, authorized to control the property, while a beneficiary is a person or a group of people for whom the assets are owned. It is remarkable that similar systems appeared as far back as in ancient Rome.
Advantages of using a trust while investing
– Tax mitigation. Trusts give the advantage of minimizing your tax bill due to distributing income among the people with lower taxed income.
– Property protection. Trust offers you control over your assets without having them legally in your name.
– Estate planning. With the help of some types of trust you can transfer your possessions to your children avoiding or minimizing taxes.
What trust is better to choose for asset investment?
Without any doubt, it is better to contact a financial planner to determine the best matching trust for your circumstances. But you may look through the information below to understand the main principles of different trust types.
- Discretionary trust is usually used when the beneficiaries are relatives. The main goal of this trust is to save family wealth for the generations to come.
- Unit trust is organized by unrelated parties, which are running business together.
- Hybrid trusts are the mix of both discretionary and the unit ones.
Of course, like all the other legal relationships, trusts have their advantages and drawbacks. It is usually quite expensive to formalize and maintain the trust. And the structure of it is rather complex. So, it is better to apply to Morgan Legal Group PC morganlegalny.com/ to find out whether a trust is profitable for you and if yes – to make the best choice for your business and family.