What is a Trust?

Accounting Definitions

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Trust Definition

Definition
A trust is normally created by a person who would like to protect their assets and reduce certain taxes including estate taxes for their heirs. It can also be used to distribute assets or funds to others.

Expanded Definition
To reduce certain tax liabilities, trusts can be created to shelter assets. For tax purposes, a trust is considered to be a type of entity much like a sole proprietor or corporation can be an entity. This entity is separate from the person who creates the trust and can distribute assets or income to beneficiaries. There are several types of trusts.

Related Article
An Introduction to Trusts

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