Use A Trust

A trust is a form of ownership with deep roots in English common law. It gives us a way to put the first concept into practice: separating ownership from beneficial use and control.

A trust begins when a person called the settlor puts an asset into the care of a trustee. The trustee agrees to hold and manage that asset for a beneficiary. The beneficiary is the person who can receive benefits from the trust.

The trustee must follow the directions in the trust. Those directions explain how and when the beneficiary can use the assets, receive money, or gain other rights. The answer comes from the trust’s terms, rather than simply from the beneficiary wanting the asset.

Families have used trusts for generations to help preserve wealth. A trust may help address poor spending, poor decisions, divorce risks, investment decisions, and creditor claims. Its effect depends on how it is written and the law that applies.

The important point is that a trust does more than put a new label on your assets. It creates roles and rules. The next concepts explain the kinds of rules that matter for asset protection.