In the fast-paced world of international investing, this can be of vital importance. The flexibility of trust extends to changes in beneficiary. The rich have long used trusts as an estate planning tool because the current beneficiary merely directs the trustee to pay the beneficiary's assets upon his death to whomever is named as inheritor. These provisions can be in the trust document itself or they can be added later. The transfer occurs automatically without any formality or delay.
Trusts do have one major disadvantage when compared with corporations.
The corporation is granted limited liability by the state that charters it. Before there were corporations, the organizers of a business were fully liable personally for the contracts entered into by the business. The corporate limitation of liability to the amount invested in the business has always been one of the corporate form's selling points. In other words, having observed all the formalities of creating and maintaining a corporation, the creator's liability will probably be limited to his investment. However, some courts have been whittling away at the concept of limited liability in recent years.