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A trust is merely a vessel designed to allow a trustee to operate and run the business for the beneficiaries of the trust. These beneficiaries are specified in the formal trust deed that is established by the trustee, and are normally defined as an individual and his or her immediate family.


  • Limited liability. A creditor is generally limited in its ability to sue a trust to the assets of the trustee.
  • Continuity. A trust continues to exist as long as the beneficiaries are alive and the trust has assets to manage on behalf of the beneficiaries.
  • Income Splitting. A trust cannot hold onto any profits. It must distribute its profits prior to the end of each financial year. However, the trustee has full discretion in deciding to whom it will split the profits.


  • Maintaining both a trust and a corporate trustee can involve extra ongoing administrative costs.
  • In almost all cases, the trustee, or the director of the trustee company, will also be the primary beneficiary. When this is not the case there is the possibility that the beneficiaries will disagree with the handling of the trust assets by the trustee.
  • A trust structure is unable to distribute any tax losses to its beneficiaries.
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