01-19-2023, 09:58 PM
Other than the specific purposes for which trusts can be used, there are some common benefits that apply to all types of trust:
- Anonymity. In most countries, the content of wills as well as the names of the owners of real estate or other assets are publicly available. The names of the beneficiaries of the trust usually remain unknown, and therefore using a trust to hold real estate or distribute assets allows you to maintain your privacy.
- Suppression of income. The ability to transfer all property and assets to the trust allows you to declare an insufficient availability of personal assets and to apply, for example, for a lower tax rate.
- Tax avoidance. In many offshore jurisdictions, trustees are not obliged to report the income of the trust to the tax authorities of the country in which the beneficiaries reside.
- Charity. In some countries, all property handed over to a charity is required to be managed under a trust.
- Capital preservation. Trusts can be used to protect the beneficiaries (for example, the settlor's children) from their own inability to manage the funds. The conditions of the trust can prescribe limits on the use of the money or the age when the beneficiaries acquire the authority to dispose of the funds and utilise the assets.