This Business News Story Was Uncovered By Us From: https://blog.eonetwork.org/2022/09/3-benefits-of-establishing-a-business-trust/
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Contributed by Kc Chohan, an EO Los Angeles member who is the founder of Together CFO, a financial strategy firm that helps business owners optimize their tax strategies so they can keep more of their wealth and focus on growing and scaling their business.
Since I started my business in 2016, I have always been curious to know the best way to protect my assets, both personal and business. The conventional wisdom of starting a company as a limited liability company (LLC) or S-Corporation was fine when we had minimal assets. However, my company quickly grew both in headcount and assets, so it soon needed more advanced financial protection strategies.
I studied the best practices of how elite and family businesses protect their assets and implemented these strategies in both my business and personal life.
I learned that it all starts with trusts. A trust is a fiduciary arrangement with three parties: grantor, trustee and beneficiary. In a trust, the “grantor” transfers the financial benefit of property—such as a company—to a “beneficiary.” The legal ownership and control of the property (or company) is either maintained by the grantor or given by appointment to another individual or financial institution, called the “trustee.”
Depending on local laws where you establish a trust, the grantor, trustee and beneficiary may be the same person or may also be two or three different people or entities.
When you create a trust, you enact a contract agreement that is much more powerful than an LLC, S-Corp or C-Corp. There are many different types of trusts, including simple trusts, complex trusts, real estate trusts, land trusts and charitable remainder trusts—the list goes on. So, it can get very confusing very quickly and you should consult your estate planning and tax teams if you are interested in pursuing this option for your business.
Here are 3 ways a business trust may benefit your company:
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