Benefits of creating a trust
A trust encompasses an important part of an estate plan and enables an individual to leave their estate to their children or to other generations. It can also be established for the benefit of the settlor, who is the person setting up the entity initially. Trusts enhance the protection of one’s estate by transferring ownership from the settlor to the trustee. There are many benefits and objectives to setting one up, as outlined below.
DeltaQuest is experienced in trust formation and can assist you with all areas of tax planning and asset protection. To learn more, please view our Set Up a Trust services page.
Trust features
There are many reasons why people choose to set up a trust. Setting up a trust enables you to exert some control over the future of your wealth and dictate what will happen to your assets. Typically, it is established as a substitute to a will or in addition to a will during the estate planning process.
One of the most common reasons to establish a trust is to enhance tax planning opportunities. Establishing such an entity reduces tax liabilities and complex taxation laws, by transferring ownership of the assets from the settlor to the trustee. Many people set up a trust in an offshore jurisdiction, thus enabling them to take advantage of complete exemption from estate and gift taxes.
Trust formation also ensures the avoidance of probate, by keeping certain property out of the individual’s probate estate. Probate is a long-winded, complex and expensive procedure that also has a number of privacy concerns, therefore avoiding probate can have significant benefits.
Creating a trust also enables the protection of the settlor’s estate and inheritance property. It is primarily established to protect property for the benefit of future generations, and therefore acts as a form of asset protection from creditors, as assets placed within the trust cannot be seized.
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