What is a Trust?

A Trust is an effective estate planning, succession planning or inheritance planning instrument for an Individual or family to ensure that their assets are protected and looked after by a Trustee or Trustees for the benefit of the trust beneficiaries.

Why do you need a Trust?

Trust is an excellent solution for many kinds of problems regarding wealth accumulation, wealth protection, wealth preservation and wealth distribution.

A trust is ideal for example when your children are too young, and you are concerned that the guardian may not do a good job of safeguarding the assets meant for their university education and life needs.

Trust helps in:

  • Avoiding probate.
  • Avoiding or delaying taxes.
  • Maintaining privacy regarding your assets.
  • Exercising greater control over your assets than might be achieved with an ordinary will.
  • Providing financial support for a person with a disability.

If you are looking to achieve one or more of these goals, you should consider setting up a trust.

PROTECTING WEALTH AGAINST THE BENEFICIARIES’ CREDITORS

This can be achieved by creating a Discretionary Trust.

In case any beneficiary becomes bankrupt, he or she will no longer be entitled to benefits from the trust.

PRESERVING ASSETS FOR YOUR FUTURE GENERATIONS

Preserving assets for your great grandchildren.

Protecting assets from spendthrift successors.

TO PROVIDE FUNDS FOR VARIOUS FAMILY REQUIREMENTS

For example: education, marriage, setting up business or compensating a non-active family member in business.

Special children requiring funds for medical, education and living expense.

WHY DO PEOPLE SET UP A TRUST?

IT HELPS TO...

Distribute wealth the way you want to

You can set goals to be achieved (such as a college degree) before your loved ones receive anything from the trust or to be used for their medical expenses. This avoids wastage of the trust fund.

Decide who receives the wealth

Just like a Will, it is your choice and no one can challenge it.

No fuss and is instantly available as it is not part of the estate and no lengthy legal process to be followed.

Trust Fund is readily available for the beneficiaries’ use because it is in the Trustee’s name. It complements the Will you wrote.

Have peace of mind

Once the trust is created and the Protector is appointed the well-being of your beneficiaries are taken care of. The assets can be protected from creditors.

Choose worthy to deserve

Disgruntled family members who are not receiving anything from the trust are unable to make claims against the trust because the assets are no longer under your name.

Your instructions on distribution in the Trust Deed can prevent your wealth from being mis-spent.

DECIDE THE OBJECTIVES OF THE TRUST

(What is the purpose of the Trust?)

DETERMINE THE TYPE OF TRUST

Specific/Discretionary/Living/
Testamentary/Revocable/Non- Revocable

DECIDE THE TRUSTEES OF THE TRUST

(Trustee is the person in charge of the assets in the trust)

DECIDE THE BENEFICIARY OF THE TRUST

(Who will get the assets & income of the Trust?)

DECIDE THE TRUST FUNDS

(What assets & properties will be transferred to Trust?)

CREATE THE TRUST DOCUMENT (TRUST DEED

(Draft the Trust Deed)

EXECUTE THE TRUST DEED

(SETTLOR SIGNS IN FRONT OF 2 WITNESSES?)

REGISTER THE TRUST DEED

(Compulsory Registration if immovable asset, movable assets registration optional)

Apply for Trust PAN Card and Open Bank Account

Transfer Assets to the Trust

No Annual Regulatory Compliance

(Except Annual Tax Returns Need to be filed)

Contact NexGen Estate Planning Solutions about the different types of living and revocable trusts available to satisfy a broad range of wealth and estate planning needs.

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The Role of a Trust Deed

The most important piece of trust documentation is the trust deed. This agreement is, essentially, what creates the trust. Outlined within the trust deed will be key pieces of information like what properties or assets will be held within the trust and who the beneficiaries are.

A trust deed is not just a guideline or a suggestion: it is a contract binding all parties involved and is enforceable by law.

In order to be officially considered a trust deed, your trust documentation should include all of the following information:

  • An official name for the trust.
  • The name of the trustee.
  • The objective of the trust.
  • The country in which the trust is founded.
  • The powers granted to the trustee, which might include adding beneficiaries or removing them.