What is the primary purpose of a trust?

The primary purpose of a trust is to hold assets on behalf of a beneficiary. A trust is a legal arrangement where one party, known as the trustee, is given the responsibility to manage the assets for the benefit of another party, known as the beneficiary. This arrangement can provide benefits such as asset protection, efficient estate planning, and ensuring that the assets are distributed according to the grantor's wishes.

Holding assets on behalf of a beneficiary allows the trustee to manage and invest the assets accordingly, ensuring that the beneficiary can benefit from them, whether now or in the future. This structure can be particularly useful in situations where the beneficiary may not be able to manage the assets directly, such as minors or individuals with special needs.

While trusts can also have implications for tax planning and investment strategies, those are not the primary purpose of a trust itself. Trusts are fundamentally designed to facilitate the management and distribution of assets for the benefit of designated individuals or organizations.