Among the chief advantages of trusts, they let you:
- Put conditions on how and when your assets are distributed after you die;
- Reduce estate and gift taxes;
- Distribute assets to heirs efficiently without the cost, delay and publicity of probate court.
- Better protect your assets from creditors and lawsuits;
Also, what is the use of a trust?
A trust is traditionally used for minimizing estate taxes and can offer other benefits as part of a well-crafted estate plan. A trust is a fiduciary arrangement that allows a third party, or trustee, to hold assets on behalf of a beneficiary or beneficiaries.
Why would you set up a trust?
Once you place assets in the trust, they are no longer yours. They are under the care of a trustee. A trustee is a bank, attorney or other entity set up for this purpose. Since the assets are no longer yours, you don't have to pay income tax on any money made from the assets.
What is the purpose of a living trust?
A living trust (sometimes called an "inter vivos" or "revocable" trust) is a written legal document through which your assets are placed into a trust for your benefit during your lifetime and then transferred to designated beneficiaries at your death by your chosen representative, called a "successor trustee."