Trust

A trust has three main roles. The settlor creates the trust and transfers assets into it. The trustee legally holds and manages those assets. The beneficiaries are the people who benefit from them. The trust deed sets out how the assets should be managed and when beneficiaries receive money.

For example, a grandparent might place 100,000 into a trust for a grandchild, with instructions that the trustee invests it and releases the money when the grandchild reaches 25.

Trusts are used for many reasons: to provide for children or vulnerable relatives, to control when and how people receive money, to keep family assets together across generations, to support charities and, in some countries, to manage taxes or avoid lengthy legal processes after death.

Trustees have a legal duty to act in the beneficiaries' best interests, a fiduciary duty. Some trusts can be changed or cancelled by the settlor, while others cannot. Trust law and taxation differ significantly between countries, so trusts are usually set up with professional advice.