A trust is a legal tool that facilitates the transfer of assets, including sentimental items, from one person to another. It can offer a degree of privacy and may provide tax benefits or efficiencies, depending on jurisdiction and specific trust structures. However, a trust can also be a complex endeavor with many moving parts.

A trustee is responsible for managing the trust assets in accordance with the settlor’s wishes and the terms of the trust document. This is a fiduciary responsibility that carries a heavy burden of liability. For this reason, it’s important to choose a trustee wisely and ask questions before agreeing to serve in this role.

The trustee must be willing to invest the time and effort necessary to ensure that the trust’s beneficiaries receive the benefits they were intended to. It is also essential that the trustee understand and comply with the settlor’s wishes, the terms of the trust and the applicable laws.

In addition, the trustee must be able to handle the duties of the position with honesty and transparency. Lastly, the trustee should be capable of working well with others, particularly those who are beneficiaries of the trust.

If a beneficiary is having trouble with their finances, it’s important that they have access to help. A trustee can work with a beneficiary to make arrangements for them to get help with budgeting, debt management and other financial issues. This can include services provided by non-profits or other community organizations, and even professional advisors.

A trust can also offer creditor protection to beneficiaries, particularly those who might not be on solid financial footing. Because the trustee is an independent party that has a duty to act impartially, creditors are generally not able to claim trust assets. This can be especially beneficial for young children who might have difficulty spending their inheritance responsibly or for those who might face financial difficulties due to illness or divorce.

For those who want to provide a lump sum inheritance to more than one beneficiary, a split-interest trust is a great option. This type of trust allows a settlor to establish separate trusts with different terms for each beneficiary. For example, a spouse might receive a lifelong income from the trust, while children might inherit the remainder at their death.

A trustee can also help a settlor create a plan for their business interests, which could provide tax advantages for future generations. This is particularly useful for businesses owned by multiple family members, or if a business partner is not an ideal choice to manage the company in the future. It is a good idea to talk to your business advisors about this type of planning.