The person who accepts the confidence is called the “Trustee”.
The person for whose benefit the confidence is accepted is called the “beneficiary”.
The subject-matter of the Trust is called “Trust-property” or “Trust-money”
The “beneficial interest” or “interest” of the beneficiary is his right against the Trustee as owner of the Trust-property; and the instrument, if any, by which the Trust is declared is called the “instrument of Trust”.
Advantages of a Trust
- No Probate fees are due on property passing outside of Probate
- The property will pass immediately to the beneficiaries.
- The terms of the Trust remain private.
3. Saving on Taxes: The growth on assets, such as shares, transferred to a Trust is not subject to taxes, because the growth belongs to the Trust.
The three main uses of a Trust are:
- To freeze the value of an estate which has a high asset value. In other words, if the author of the Trust transfers an asset to a Trust, the asset’s value does not grow in his hands, which would increase the amount of Trust that will have to be paid on his death.
- To hold and protect assets for minors/incapacitated dependents.
- To protect assets in the event of insolvency. Creditors cannot claim money held in a Trust.