Trust

A trust involves three roles: the grantor who creates and funds it, the trustee who manages the assets, and the beneficiary who receives benefit from those assets. The trust agreement — a legal document drafted by an attorney — spells out the rules: how assets are invested, when and how distributions are made, and what happens when the grantor or beneficiaries die. Families must work with qualified attorneys and CPAs when establishing any trust, as the legal and tax implications are significant and jurisdiction-specific.

Trusts matter to families for several overlapping reasons. Assets held inside a properly structured trust typically bypass probate, keeping transfers private and faster. Certain trust structures can also provide asset protection, meaning creditors of a beneficiary may have limited ability to reach trust assets. Others are designed with specific tax objectives in mind, though the rules governing those outcomes change and require professional guidance.

A common confusion is treating "a trust" as a single thing. In practice, trusts come in many forms — revocable or irrevocable, for a single generation or several, designed for real estate or business interests or charitable goals. A three-generation family with two operating businesses might use several distinct trusts simultaneously, each serving a different purpose within the family's broader organizational structure. As family offices are fundamentally organizational infrastructure, trust planning is often one of their earliest and most central functions.