Family trust - Financial definition
Concise definition of the term family trust
A family trust is a legal entity created to hold and manage assets for the benefit of family members, ensuring the protection and distribution of wealth according to the grantor's wishes.
Comprehensive definition of the term family trust
In a broader context, a family trust serves as an estate planning tool that provides tax advantages, asset protection, and continuity of asset management across generations. It often includes detailed provisions on how income and principal are to be distributed among beneficiaries, which can help in minimizing family disputes and ensuring the financial security of future generations.
Commonly used in wealth management, family trusts can hold a variety of assets, including real estate, investments, and business interests, and are structured to provide both financial benefits and legal protections to family members.