Family Trust
A family trust is a legal structure that holds assets for beneficiaries under defined rules, often used for estate planning, governance, and asset protection.
Allocator relevance: Shapes beneficial ownership, control dynamics, and decision authority—critical for accurate entity mapping and legal diligence.
Expanded Definition
Trusts can hold operating businesses, investment assets, and real estate, and they often determine who can direct decisions (trustee) versus who benefits economically (beneficiaries). For family offices, trusts can influence how assets are managed, how liquidity is accessed, and how intergenerational transfers are structured.
From an allocator intelligence perspective, trusts often sit behind holding companies and SPVs, making beneficial ownership mapping and governance understanding essential.
How It Works in Practice
Trust structures vary widely by jurisdiction. Trustees may be family members, professionals, or institutions. Investment decisions may require trustee approval, beneficiary consent, or adherence to trust provisions.
Decision Authority and Governance
Trust governance defines authority boundaries and can create additional approval layers. Accurate datasets distinguish legal control from economic benefit and reflect that in decision-chain mapping.
Common Misconceptions
- Trust beneficiaries control the assets.
- Trusts are only for tax reasons.
- Trust structures are simple and transparent.
Key Takeaways
- Trusts separate legal control from economic benefit.
- They matter for ownership structure and decision authority mapping.
- Treat trust-related data as high-stakes and evidence-weighted.