A living trust, also known as an inter vivos trust, is a legal arrangement where a person (the “Founder/ Donor”) transfers ownership of their assets to a trust during their lifetime. The trust is managed by trustees, who are appointed by the Founder, and the trust assets are held for the benefit of the beneficiaries that are named in the trust deed.

The founder can also be a trustee and a beneficiary but the Founder cannot be the sole beneficiary, as the trust needs to be managed and maintained independently from the estate of the Founder.

There are several benefits to creating a living trust, including:

• Estate planning: A living trust can be an effective tool for estate planning, as it allows the Founder to transfer assets out of their estate and into the trust, which can help to minimize estate taxes.
• Protection of assets: Assets held in a living trust are protected from creditors and legal claims. This can be particularly useful for people who are at risk of being sued, such as business owners or professionals.
• Continuity: A living trust can provide for the continued management and distribution of assets even after the Founder’s death or incapacity, as the trust continues to exist and be managed by the trustees.
• Flexibility: A living trust can be customised to meet the unique needs of the Founder and their beneficiaries, and can be amended or revoked at any time during the Founder’s lifetime. The Founder can also make provision for the amendment of the trust deed, after his/ her death.
• Generational wealth and assets management: Assets can be used by various generations of people in a family because the assets are owned by the trust and not individual persons. This will also prevent family assets being owned and/ or controlled by spouses who marry into the family.
• Independent management: Assets cannot easily be squandered by heirs as the trust assets are managed by the trustees.

There are many misconceptions around trusts, taxation and estate planning. As the financial circumstances of people vary, the estate planning of people will differ accordingly. It is accordingly recommended that you seek the advice of legal professionals such as Julies Attorneys who specialise in estate planning and trusts.

There are many misconceptions around trusts, taxation and estate planning. As the financial circumstances of people differ, the estate planning of people will differ accordingly. It is therefore recommended that you seek the advice of legal professionals such as Julies Attorneys who specialise in estate planning and trusts.

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