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Succession Planning

Types Of Trusts

Now that we are familiar with the concept of trust, we will learn to create trust. But before that, let us discuss the different types of trust. 

 

a) A trust structure comes with certain inherent advantages. A trust provides the flexibility to be set up in more than one form or in hybrid forms as per the requirement. 


b) A trust can be either private or public. A private trust is a trust generally for the convenience and support of individuals or families. 


c) Trust can also be structured as revocable or irrevocable.


d) A revocable trust can enable the settlor to exercise control over the property but can be prone to clubbing provisions under the tax laws. 


e) An irrevocable trust can provide safeguard against future creditor claims on the assets in case of bankruptcy, since the settlor ceases to have the title to the trust property, yet at the same time enables indirect control over the property through terms of the trust deed. This is one of the main benefits of a trust structure which allows for preservation of your wealth.

 

 

How can a trust be created?

 

a) A living trust is a trust that is created while the settlor is still living, and in that case, they may also be the trustee as well as the beneficiary until a triggering event, such as their incapacitation or death, after which named successors take over. 
This allows a living trust to also act as a mechanism for managing finances in the event you can no longer manage them on your own.

b) A trust can be also formed according to instructions in a will. This is known as a testamentary trust.

c) Assets that can be transferred and owned by a trust include real estate, stocks, bonds, valuable personal property and businesses. 


A trust, in relation to an immovable property, must be in writing and registered.

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