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On this page we try and give you a simplified definition of a trust, and what are the most common uses and benefits for trusts. In its simplest form a trust is an entity which holds property for the benefit of the people for whom the trust was set up. It is a legal structure, and is designed for various reasons, one of which may be to avoid the need for executor ship. Another major reason for trusts is to protect personal or business assets. A properly drawn up trust will protect individuals and business owners from creditors should they face liquidation.

Uses and Benefits of Trusts in Estate Planning

Estate Duty Pegging
A trust can be used to ?peg? the value of your estate,. This means that any growth in the value of assets held by the trust are excluded from the person?s dutiable estate. Because the trust assets do not form part of an estate, no executor's fees are payable on such assets.

Protection of Assets
The trust allows a person to enjoy the use of an asset without owning the asset. Thus again the trust can offer protection of assets against creditors in the event of the founder?s or beneficiaries? insolvency.

Cleaner Succession Planning
The use of a trusts makes for easy succession of interests in property. The normal winding up of an estate can take anywhere from 9 months to a few years. By using a trust structure this whole process is bypassed, allowing the transfer of the use of assets and property to be smooth and hassle free. This means your dependants need not worry about being left in the dark after who have gone.
A trust can further minimize the emotional stress of the family as the trust continues without any of the formalities required with a deceased estate. The assets of the trust can further also provide and source of income for dependants while the rest of your estate is being wound up. A trust structure also ensure the quick distribution of assets to beneficiaries at far less cost, and speeds up the process of administering a deceased estate, as it substitutes the will in regard to those assets held in trust.

Easy splitting of indivisible assets
If you have more than one beneficiary it is often difficult to divide up the estate and give an equal split to the various individuals, especially when it comes to assets such as real estate. These assets can be held in trust for the benefit of several beneficiaries.

Succession
Using Trusts can avoid the costs of successive administration of estates by providing for successive beneficiaries.

A great way for holding assets for minors
If you have children who are still minors and are not sure how you can ensure that they are sufficiently cared for after your death, the maintenance needs of your minors can be taken care of by using a trust structure. While they are minors the assets and funds in the trust can be careful controlled and used for their maintenance, and the trustees, at their discretion can determine when the trust is to be terminated, and split into separate trusts for each of the children as they come of age.

Tax
Trusts are essentially estate planning vehicles, however there are opportunities where trusts offer income tax savings, especially after the settler?s death, by being able to create a multiplicity of income taxpayers and splitting the income between them, thereby paying at an overall lower rate.

Confidentiality
Unlike a will and all deceased estate records, which are open for public inspection, a trust remains confidential.

Is a trust for me?

If you have already decided that you would like to look into setting up a trust structure, then why not book some time with a consultant by answering some questions at the following link?.

If you would like to spend some time really understanding the benefits of trusts, then why not attend a seminar in your area on trusts and their benefits. To find out more about the costs of setting up a trust and the benefits to you and your estate, simply complete this short form and a consultant will contact you with the detail