A trust is a legal arrangement where one party (the trustee) holds and manages assets for the benefit of others (the beneficiaries), based on terms set by the person who creates the trust (the settlor).
Trusts are widely used in private wealth planning to protect assets, manage succession, and provide long-term financial security for families.
Common types of Trusts:
Discretionary Trust
- Trustees decide how and when beneficiaries receive assets
- Offers maximum flexibility and asset protection
Fixed (interest-in-possession) Trust
- Beneficiaries have defined rights to income or capital
- More certainty, but less flexibility
Revocable vs Irrevocable Trusts
- Revocable: Can be changed or terminated by the settlor
- Irrevocable: Generally cannot be changed; stronger for asset protection
