A trust is a legal instrument whose purpose is to preserve property and best dispose of it. At the same time, one person (called the “trustee“) transfers his property to another person (receiving the status of “trust owner“). The trustee undertakes to dispose of this property in favor of a third party (referred to as a “beneficiary“).
A trustee is an individual or legal entity. The beneficiary is always at least one person or entity, but there may be several of them. The assets of the trust can be any valuable property. For example, bonds, money, real estate, units in investment funds.
Trusts in the United States can be used for:
– Reducing the tax burden on property or profit
– Best disposal of property or assets
– Asset management in the best way with the help of a legal entity or individual
– Preservation and protection of valuable property
Often, trust creators fear that after the creation of the trust they will lose control over their assets. There are ways to maintain control. To do this, you need to prescribe all the conditions for the disposal of property in the trust contract. You can also specify the powers of the founder in the contract. For example, that he has the right to replace the trustee at any time. The founder may appoint a close friend or his relative as a protector. The contract prescribes the powers of the protector. For example, he can also change the trustee, add or remove beneficiaries. With the help of a trust, you can avoid taxes on donations and profit. To do this, the property must be transferred to the trust before immigration to America. According to U.S. tax regulations, all profits of the trust are the income of its founder. Therefore, the founder will have to indicate all the profit of his trust in the annual tax return.