There are important points to understand about what actually happens to the control of assets once they are placed in trust. For more info, visit - http://www.richardcayne.com/richard-cayne-meyer/preserving-wealth-for-future-generations-the-benefits-of-a-trust/

1. Preserving Wealth for Future Generations – The Benefits of a Trust
For hundreds of years trusts have been used for succession and estate planning
purposes. While numerous in structure and complexity, they all have the same basic
principle: Under a trust, the owner of assets, the “settlor”, transfers wealth to a
“trustee” to hold and administer for named “beneficiaries”, who may be family
members, other individuals or organizations, or even the settler themselves.
Trusts can be tailored to your exact needs, both now and as your needs change over
time. Trusts have the flexibility to hold all forms of cash, securities, structured
products and other bankable assets. In certain situations, trust structures may hold
non-bankable assets such as residential and commercial real estate, art, boats,
planes, and family operating companies which can be part of the overall wealth
management solutions a family should look to incorporate into their planning.
These are some of the essential terms surrounding the establishment and
maintenance of trusts:

2. A trust is a legal relationship between a trustee and the settlor by which the settlor
transfers his or her assets to the trustee and which binds the trustee to administer
these assets in the best interests of the beneficiaries of the trust.
Trust

3. The settlor is the person who establishes the trust by transferring property to the
trustee(s) to hold under the terms of the trust deed.
Settlor

4. The choice of trustee is very important because the trustee is the legal owner of the
trust assets once they are placed in the control of the trust. The overriding duty of a
trustee under the law is to take care of a trust’s assets in the best interests of the
beneficiaries. A failure in that duty may make the trustee liable for a breach of trust
and responsible for any resultant loss. In many common law jurisdictions, any
individual or company may act as a trustee and take on the fiduciary duties and
responsibilities of a trustee. Careful consideration of the trustee is essential as the
settlor will transfer assets into trust to be administered by the trustee. It is
important to ensure that the trustee is capable of administering the trust.
Trustees

5. The beneficiaries are the person(s) selected by the settlor for whom the settlor
wishes the trustees to hold the property. In the case of a trust set up primarily for
family succession planning, the beneficiaries will generally be the settlor and his or
her family, but they could also include a charity or other individuals or institutions.
You can also create as many conditions as desired for the beneficiaries and upon
such conditions the trustee can distribute funds in accordance to those wishes.
In other cases, the beneficiaries may be, for example, members of a company
pension fund or a profit-sharing plan.
Beneficiaries

6. A trust deed is a written document that sets out the
powers and duties of the trustee and defines the
beneficiaries and trust assets. The deed may
contain specific provisions on beneficiaries’
entitlements, or it may leave this to the trustee’s
discretion. These are usually referred to as “fixed
interest” and “discretionary” trusts respectively. A
trustee of a discretionary trust may be guided by a
letter of wishes from the settlor. In addition,
distributions or other decisions may require the
consent of a person, such as a “Protector”, who
knows the settlor.
Trust Deed

7. One of the more common forms of trust used is a discretionary trust, which may be
revocable or irrevocable. In its usual form, it provides the trustees with enough
discretion to carry out their duties and exercise their powers, while taking into
account changing family, business or jurisdictional circumstances. In contrast, fixed
interest trusts define the interests of one or more of the beneficiaries in the trust
deed. For example, a beneficiary may have a right to all of the income of the trust
assets during his or her lifetime, i.e., a fully vested interest. Again, the trust may be
revocable or irrevocable. It is also quite common to encounter a mixture of the
above. For example, a trust might start out as a discretionary revocable trust, but
upon the occurrence of a certain event may become irrevocable with defined
interests in income for certain beneficiaries during their lifetimes, with further
discretionary trusts to follow their demise.
Types of Trusts

8. In administering a discretionary trust the trustee may receive guidance from the
settlor. This usually takes the form of a letter of wishes addressed to the trustee.
Although this letter does not form part of the trust deed and is not a legal
document, it is intended to assist the trustee. Beneficiaries do not usually have any
right to see this information, which is a private letter between settlor and trustees.
Letter of Wishes

9. Some Settlors choose to appoint a Protector for their trust. The Protector may be a
close family friend or advisor of the settlor. The Protector’s role is described in the
trust deed. As the term suggests, the Protector ensures that the interests of the
beneficiaries are safeguarded in line with the Settlor’s intentions.
Protector