A family trust company or a partnership can prove to be one of the most important asset protection tools prevalent in the market. If it is drafted well and adequately funded, it can act as a barrier to the creditor for taking up your property.

As the name suggests, a family trust company refers to an establishment whose ownership stakes are largely held by the members of a family. A trust is formed when an individual holds a share in a property for the benefit of another individual, also referred to as a beneficiary. A family trust is formed to benefit the members of a family.

The aim of a family trust company is that the personal assets are transferred to the trust. This implies that the individual has no assets against his or her name. It is only through the trust that the individual has some sort of control over the assets and therefore is benefited by the same.

A family trust must possess the following factors:

• The Trustees: The trustees are responsible for the administration of the trust.

• The Settler: The settler is the one who is responsible for the setting up of the trust and is also the one who initially holds the assets and transfers them later on.

• The Trust Deed: This is the official document that documents the wishes of the settler and initiates the trust.

• The Beneficiaries: The beneficiaries are the ones who benefit from the trust. The beneficiaries include family members.

A family trust passes on the legal control of the assets owned by one individual to another. This limits the imposition of future inheritance taxes on the property. The beneficiaries of the trust are not supposed to pay any income tax on the amount earned through the trust.