What is a Trust?

A Trust is a legal document in which property is held and managed by a Trustee according to the purpose of the Trust, for the benefit of another individual as a beneficiary. The structure is shown below:

What is a Trust?

Note) Living Trust is the most well known to the public. This type of trust is set up to avoid Probate after the death of Trustor. Please note that Living Trust does NOT protect you from lawsuits, collection from creditors unlike other Trusts introduced in this website; CRT do.

Example: Let's assume that a property owner transfers the ownership to the Trust, then sells the property to third party and invests the proceeds in an annuity. The trust pays the owner a predetermined income. (Trust Dividend) The right to receive a Trust Dividend is called.

・Purpose of a Trust

A goal that a Trustor wants to accomplish by setting up a Trust and make a decision on how to apply later by the trustor himself. This procedure is considered legal.

・Trustor

A person who transfers the ownership of his or her assets to set up a Trust.

・Trustee

A person who manages, invests in, and sells a Trust in pursuant with the purpose of Trust.

・Beneficiary

A person who receives benefit from Trust assets. A Trustor can also be a beneficiary.

・Trust Assets

The assets in Trust that a Trustor transfers to.
Trust Assets may include real estate / cash / securities (stocks, bonds) / credits / intellectual property (patents, copyrights) / jewelry