What is the main purpose of a trust?

The primary purpose of a trust is to manage and protect assets for the benefit of designated beneficiaries. A trust is a legal arrangement where one party, the trustee, holds and manages property or assets on behalf of another party, the beneficiary. This arrangement allows for the organized management of assets, ensuring that they are preserved and used according to the terms set forth by the trust creator, known as the grantor.

The flexibility of trusts allows for specific instructions regarding how and when beneficiaries receive benefits, which can include income from the assets or the assets themselves at certain ages or under specific conditions. Furthermore, trusts can provide a layer of protection for assets against creditors and can ensure that assets are not mismanaged or lost due to the beneficiary’s inability to handle them.

While distributing assets equally among heirs, serving as a legal document for property transactions, and minimizing taxes are considerations that might relate to trusts, they are not the main purpose. The fundamental aim of a trust centers around its ability to serve the best interests of its beneficiaries while being managed in a way that aligns with the grantor's intentions.