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TRUST A trust is a device by which a person has ownership and control of his assets to a trusted third party (The "Trustee") to operate for benefit of "Beneficiaries." This gives the person who "settles" the trust, known as the "Settler" the ability to divest himself of ownership of his assets with several resulting benefits. The settler will choose trustees he can rely upon completely to look after his asset and carry out his wishes for administration and eventual distribution of the assets. Some trusts involve the handing over assets to a trusted friend or lawyer. However, complications may arise if the friend dies or is unable to continue the administration, so a corporate trustee like AIIMCO is normally used to ensure continuity. The document settling our the structure of the trust is called the "Trust Deed" and much care has been taken in drafting this, taking into account the client's situation, particularly as to tax domicile, and the nature of assets. Specific Beneficiaries may be named in the trust deed. The Trustees administer the trust at their discretion, but a "Letter of Wishes" is often drawn up by the settler, setting out how he would like the trust to be run. In practice, the Trustees will operate in accordance with the Letter of Wishes but are not legally bound to do so. |
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