Trusts can be used whether you are considering managing your own assets or if you wish to gain control over how your assets will be handled on your death. You can make use of asset protection trusts to protect your professional and personal assets from creditors. It is a safe way to plan your goals regarding your wealth.

A trust is viewed as a legal entity which is drafted to retain an asset for the benefit of another. There are three parties involved in this legal entity. The person who creates and funds the entity is known as the trustor or grantor. The person who received benefit from it is known as the beneficiary. The person who is responsible for its administration is the trustee, who is also bound to act in the best interests of all beneficiaries.

This type of entity is formed by the raising of a legal document, called an agreement. The agreement stipulates the names of the trustee and the beneficiaries. Instructions stipulating what the beneficiaries will receive are included in the document. The list of trustee duties, the date it will end and all other stipulations are included in the document.

The trust may contain any type of asset, including bonds, real estate and stocks. Your reasons for implementing the entity will be the determining factor as to what is placed in it. For example, you may want an entity that is useful for the payment of taxes and other estate duties or for the financial provision of your family when you die. In these cases, it may be necessary to add real estate or a life insurance policy to the entity.

There are several reasons for the use of this type of entity. People use it to minimize taxes on their estate, to protect their assets from potential creditors and to preserve specific assets. It may be used to move certain assets to those who pay lower income taxes. You should consider asset protection if you want your assets to remain in your possession.

Asset protection is classified as an irrevocable trust for the protection of your assets from creditors. To establish it, you can transfer specific assets to the entity. Once transferred, the assets will afford protection from all future creditors.

You will have some form of control over the assets that are placed within the entity. As the trustor or grantor, the law allows you to direct the manner in which the assets are invested. You will be allowed to receive income from it and determine how distributions are provided to third parties.

You may not gain total control over every asset in the trust. However, it does not suggest that you will lose ultimate control over the benefits derived from the property which you have transferred.

You should consult an attorney to find out about the various types of entities. A trust which you refer to in your will is called a testamentary entity. You can make use of a living trust while you are alive. If you wish to have the facility to amend or cancel the entity, you will obtain a revocable version, or if you do not want this facility, an irrevocable entity. Your choice will be wholly dependent on what you currently require and may require in future.

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