What is a Trust?
The meaning of a "trust" is one person (or more than one person) holding property for the benefit of someone else. There is a separation between the legal owner of the property, the trustee, and the person who enjoys the benefits of the property, the beneficiary. It is the trustee who functions as a caretaker making decisions about how the property is managed. One of the trustee's main roles in doing this is to make prudent investments with the money held inside the trust. It is the beneficiary of the trust who enjoys the benefit and value of the property.

What does a Trustee Do?
A trust is usually created through a written document which describes the role of the trustee and under what circumstances the beneficiary can receive the property being held by the trustee. Depending on the terms of the trust, the trustee can have a little or a lot of discretion in making decisions respecting management of property and distribution to beneficiaries.

Why Establish a Trust?
The reason to set up a trust is to save money and protect wealth.

Options — Family Trusts made through your Will
You can set up a trust for someone which will take effect after your death. This is called a testamentary trust. Here are some situations where a family trust can be very useful:

• It allows you to give money to children or young adults while making sure that the money is being carefully managed by a trustee until the children are old enough to manage it themselves. This means you do not have to worry about your children wasting their inheritance before they are mature enough to handle it;
• Using a trust to transfer the value of your estate to your spouse when you die avoids having to pay tax right away. This type of trust will usually include a provision for transferring the estate to the children when the second spouse dies;
• A family can set up a special type of trust, referred to as a Henson Trust for children who are disabled.
• If you have a life insurance policy which will go to a child under 18 years, you can set up a trust which will capture the proceeds of the policy at your death. This ensures that you can postpone the inheritance beyond the age of majority. For example, you may wish a child to
• From a tax savings point of view, a trust which takes effect after your death receives special tax treatment. The trust is taxed at a rate based upon the value of the trust. The benefit of this is substantial when you want to leave money to a number of separate individuals. If you set up a different trust for each one of your children, for example, the overall amount of tax they would pay is reduced as each trust is taxed separately.

Trusts Made During Your Lifetime
There may be situations where you want to simply give away your assets before you die. One way of accomplishing this is to create a trust for the benefit of a family member while you are still living. The benefits of this kind of trust are: