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PASS PROPERTY UNDER YOUR
DIRECTION
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Benefits of a Revocable
Trust
With a revocable trust (also known as a living
trust), at any time should your circumstances change, the trust can be
modified or even revoked by you, the grantor. The trust continues to
operate after your death, to protect your family and beneficiaries. The five
most important benefits of having a living trust are:
- Protection in the event of incapacity
- Professional management of assets
- Probate avoidance
- Confidentiality
- Establishment of a relationship with a
professional trustee
Benefits of a Business Trust
What are Business Trusts?
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Business trusts are alternatives to corporations in the form of trusts. Thus, the typical company – shareholder relationship inherent in a corporate environment is replaced by a trustee – beneficiary relationship. While trustees may be corporations (including
trust companies), commonly in the publicly markets, trustees of business trusts will be
individuals who, for practical purposes, will function in much the same way as directors of a
company function.
How is a Business Trust Set Up?
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Structurally, the a Business Trust is an unincorporated business
association that is used to hold assets for the benefit of the trust
owners. A Business Trust can be established with relatively little
expense, and the trust income is not subject to state income tax.
Additionally, a Business Trust provides a level of ownership privacy
that is appealing to many taxpayers. The requirements are the same
as with any other type of trust instrument.
What Kind of Businesses are Best Suited for Ownership by Business Trust?
- Many of the assets and businesses currently owned by business trusts previously were owned by companies. When owned by companies, such assets and businesses did not typically result
in dividends payable to shareholders that were even remotely comparable to the yields being offered by business
trusts. One reason why business trusts are able to offer an enhanced yield relative to corporate ownership is that business trusts are “pass through” vehicles which do not attract income tax on their distributions, as compared with corporations which are separate persons
at law and therefore must bear its own income taxes and maintain its
own tax records.
How Can a Business Trust Help Me?
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A Business Trust is a unique vehicle that provides numerous benefits in
the areas of taxes and asset protection. Simply put, a Business Trust
can help reduce gift and estate taxes, as well as enhance the protection
of assets and owners.
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