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What is a Trust?

A trust is a legal arrangement where an owner (Settlor) transfers property or assets to a trustee that may be an individual or a financial institution. The trustee manages the assets or property for the beneficiary who may receive income, assets or property from the trust. A trust that takes effect after your death is called a Testamentary Trust, while one set up while you are alive is called a living or Inter Vivos Trust. The primary purpose of a trust is to transfer ownership of assets to your beneficiaries while maintaining control over the assets.

What is a trust chart
Inter Vivos trusts can be used in estate planning in a variety of ways:
  • - Protect property and assets from creditors.
  • - Minimize incomes tax owing at death by freezing the value of investments or business shares.
  • - Provide income to a spouse or child while retaining control of the capital.
  • - Reduce probate fees.
Testamentary trusts can be used to:
  • - Designate funds for a specific purpose such as education expenses or the purchase of a first home.
  • - Provide for and manage funds left to a person not fully capable of handling his/her own affairs.
  • - Ensure that assets are passed to children from a prior marriage rather than all being passed to the second spouse's beneficiaries. .
  • - Reduce probate fees.