By parting with his property during his lifetime to trustees the settlor avoids this eventuality and so preserves family wealth. A Trust is akin to a limited liability company and hence notwithstanding the death of the settlor its management and operation continues especially where the trustee is a well established organization that has been specifically authorized to manage trusts. Since by setting up the trust the assets technically do not form part of the settlor's estate, the assets cannot be seized in the event of financial insolvency. Tax avoidance in relation to income or assets Generally, in most offshore jurisdictions the trust is administered free of taxation. Onshore jurisdiction will general not allow trusts to be administered tax free.
Trusts provide a means whereby persons under a disability can be looked after.
The alternative to a trust is a will. A will is a public document once probated and does not provide the kind of confidence as the trust. Estate Planning Trusts allow the continued administration of property after the settlor's death in the way that he has requested and thus it relieves him of fears that the estate will be squandered away upon his death. Some countries have introduced anti-avoidance laws to lessen those advantages and it is therefore important that the Trust be carefully drafted. A settlor can set out in the trust instrument the way in which he wishes the trustee to administer, invest and distribute trust property to beneficiaries.