A Living Trust, is a legal entity created to hold ownership of an individual’s assets during their lifetime. The person who sets up a Trust is called the “settlor”.
Once assets are placed in the Trust, they are managed by a "trustee" for the benefit of the Trust’s beneficiaries.The settlor can act as the trustee, allowing them to retain control over their assets during their lifetime, or they can appoint one or more other people to serve in this role.
The assets within the Trust will be distributed after the settlor’s death, or at a specified time the settlor chooses when the Trust is set up. A Trust is a separate legal entity, meaning that there can be tax savings and other benefits when transferring assets into its control.
Generally speaking, Trusts are established to provide legal protection for the settlor’s assets, to ensure those assets are distributed according to their wishes. This can save time, reduce paperwork, and in some cases, avoid or reduce the estate’s Inheritance Tax liability. However, there are many different trust structures available and it is important to carefully consider the rules and tax implications of your estate-planning decisions concerning trusts.
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