How does a Trust Work?
Trust requires the Settlor to give away his assets such as shares, money and property to a trustee such as to hold them on trust for the benefit and enjoyment of the beneficiary(ies). The Settlor may impose conditions for the Trustee to follow, such as releasing monies only for a certain purpose or in a staggered manner.
Thus, in a Trust the Trustee receives the assets from the Settlor and is legally obligated to hold and manage the assets for the enjoyment of the beneficiaries during the trust period set by the Settlor.
Would having a Will be sufficient, without having a Trust?
Without doubt, having a Will written is important. However, unlike a Will, a Trust can serve many purposes to complete estate planning. For instance, a Trust allows wealth protection and preservation which a Will cannot do.
What Assets can be included in a Trust?
The assets commonly used to set up a trust are: cash, insurance policies, mutual funds, properties, shares. The property under Trust do not belong to the Trustee personally. Though the trust property is registered in the Trustee’s name, it is NEVER part of the Trustee’s own properties when he dies. Only the Trust beneficiaries will be entitled to the Trust Fund NOT the Trustee’s own beneficiaries.