Trusts

A trust is a contract by which a person transfers assets to a trustee to hold those assets on behalf of those persons whom the testator wishes to benefit from the trust assets (the beneficiaries).

A trust can be founded by the testator in his will (a testamentary trust, which will come into effect upon the death of the testator).

The reasons for placing assets in a trust are numerous. A frequent reason for a testamentary will is to preserve the testator's estate, either in whole or in part, for the ultimate benefit of the testator's children but to provide for the testator's widow to enjoy the income of the trust assets during her lifetime. It is possible to even preserve the capital for descendants beyond the testator's children. Another reason for a testator to deny his widow control of his estate is to ensure that this removes all possibility that others could persuade the widow to part with her capital to her detriment. In other words, a trust would protect such a widow against her own inabilities, weakness or inexperience. It follows also that such a protective trust could be employed for the protection and security of any person suffering under a disability.

Trusts whether created in a will or inter vivos, can also be created for the benefit of charities, or educational institutions. Again, grandparents may wish to create an educational trust to ensure the education of their grandchildren.