As an entrepreneur and investor who has spent decades building businesses and amassing assets, I've learned that true success isn't just about what you accomplish in your lifetime—it's about what you leave behind. future generations. After all, what good is having a thriving real estate portfolio, multiple businesses, and a healthy bank account if it all ends up in probate, caught in the net of estate taxes, or dissipated due to estate planning? weak? To prevent these pitfalls, I took a crucial step: I set up a trust.

or FAITH it's not just a legal tool for the ultra-wealthy—it's a strategic and affordable way to ensure your loved ones benefit from your hard work. By placing my real estate holdings and business entities into a trust, I found a way to not only protect these assets, but also ensure tax efficiency, privacy and future wealth growth.

In this article, I'll walk you through the basics of trusts, explain the different types, and detail the strategic steps I've taken to create a legacy plan that will outlast me. My goal is to help you understand how a trust can save on taxes, secure your inheritance and give you peace of mind.

Related: What is a trust fund and how do they work?

Understanding the basics of a belief

At its core, a trust is a legal agreement in which you (the giver) transfer ownership of certain assets – such as property, cash, stocks and businesses – to another entity ( trustee) who will manage these assets on behalf of people or organizations (the beneficiaries) you choose. While the trustee legally owns the assets, he must manage and distribute them strictly according to the instructions you set out in the trust agreement.

The beauty of a trust is that it can be tailored exactly to your needs. Unlike a simple will, which only comes into play after death, a trust can start working while you're still alive, giving you more control, oversight and flexibility in managing and distributing your assets over time. This can help bypass the costly, time-consuming process and keep your affairs private.

Why I chose a faith

Before I dive into the “how,” let's talk about the “why.” When I first started building my portfolio, I assumed that a basic will would suffice. But as my business interests expanded and my real estate holdings grew, I realized I needed something more robust and flexible—something that would provide peace of mind. wealth transition no taxes, fees and unnecessary headaches.

A trust allowed me to:

1. Avoid verification: By placing my properties and businesses in a trust, I ensured that they were not entangled in a lengthy probate process. This means my heirs won't have to deal with months – or years – of legal fees and court proceedings.

2. Tax reduction: Carefully choosing the type of trust can help minimize estate taxes, gift taxes, and even income taxes under certain conditions.

3. Maintain control: Even after I am gone, the trust agreement will ensure that my assets are managed and distributed according to my instructions, preserving my vision for my legacy.

4. Privacy: Unlike wills, which often become part of the public record after death, trusts remain private documents. This ensures that my family's finances and future plans do not become fodder for rumours.

5. Preserve wealth for future generations: With a belief, I can describe conditions that extend far beyond my children, reaching grandchildren and even great-grandchildren, providing the wealth of generations.

Types of beliefs to consider

When it comes to trusts, one size does not fit all. Different types offer different benefits and levels of control. Some of the most common include:

1. Revocable Living Trust:

   • What is: A trust you create during your lifetime and you retain the right to modify or revoke it.

   • Benefits: Flexibility. Since you can change the terms at any time, it's a great option if your financial situation, family dynamics or long-term goals evolve.

   • Tax considerations: The assets remain part of your taxable estate, so this trust does not offer significant tax benefits. Its main advantage is avoiding verification and maintaining privacy.

2. Irrevocable Trust:

   • What is: Once created, terms generally cannot be changed (with some exceptions and with the consent of the beneficiaries or court approval).

   • Benefits: It offers significant estate tax benefits because assets are often taken out of your taxable estate. This makes it ideal for tax planning and preservation of wealth.

   • Tax considerations: By relinquishing control, you can protect assets from estate taxes, gift taxes and, in some cases, from creditors. Income generated by the trust may be taxed at the trust rate, but strategic structuring can mitigate this.

3. Dynasty Faith (Faith that Passes Generation):

   • What is: Designed to pass wealth through multiple generations.

   • Benefits: Protects assets from estate taxes on any generational transfer. This is a powerful way to extend your legacy indefinitely.

   • Tax considerations: Structured properly, it can minimize or eliminate estate taxes for future generations, allowing your wealth to grow and grow over time.

4. Charitable Remainder Trust (CRT):

   • What is: It allows you to receive an income stream from assets placed in trust, with the remainder ultimately going to a designated charity.

   • Benefits: You get an immediate charitable deduction and can avoid capital gains taxes if you contribute appreciated assets.

   • Tax considerations: It reduces your taxable wealth and provides ongoing tax benefits while supporting philanthropy the goals.

Related: What is a living trust? Here is everything to know.

Steps to build your confidence

Creating a trust can seem complex, but by breaking it down into manageable steps, you can ensure a smooth process.

1. Identify your goals: Before you begin, clarify what you hope to achieve. Do you want to avoid probate, minimize taxes, support a charitable cause, ensure your heirs receive assets at certain ages, or all of the above? Having clear objectives will guide your choice of trust and shape the trust agreement.

2. Take inventory of your assets: Compile a complete list of your assets – real estatebusiness interests, stocks, bonds, cash, insurance policies and valuable personal property. Understanding what you have and how it is structured is essential to deciding which assets to place in the trust and what type of trust will best serve those assets.

3. Consult a qualified attorney and financial advisor: The laws governing trusts vary by jurisdiction, and changes in tax law mean you need the current and in-depth knowledge of an expert. Work with an experienced estate planning attorney who can draft trust documents and tailor them to your unique situation. or financial advisor or CPA can provide insight into the tax implications of various trust structures, ensuring your arrangement is legally sound and financially beneficial.

4. Choose a trustee: This is a critical decision. Your trustee can be an individual you trust – such as a family member or close friend – or a professional trustee, such as a corporate trust company. Consider someone (or an entity) with strong financial knowledge, a proven track record of accountability, and impeccable integrity. You can even appoint co-trustees to balance skill sets.

5. Draft and finalize trust documents: Your attorney will prepare the trust deed, clearly outlining the rules, restrictions and distributions. Review this thoroughly and make sure it matches your goals. Once you are sure, sign the documents and have them properly witnessed and notarized, following local requirements.

6. Fund the trust: Creating a trust is only the first step. You must then transfer ownership of the designated assets to the name of the trust. This may mean re-typing real estate deeds, changing ownership of business shares, and moving bank and brokerage accounts into the name of the trust. Without funding, a trust is just an empty shell.

7. Review and update regularly: Life is not static. Family situations change, tax laws evolve, and your wealth is likely to change over time. Periodically review the trust documents with your attorney and advisor to make sure it still meets your objectives. Revocable trusts can be easily modified, while irrevocable trusts may need special procedures to adjust the terms. Regardless, being proactive keeps your plan relevant.

Related: How entrepreneurs can eliminate this damaging tax liability with smart planning

Tax savings and inheritance gain

By creating a trust, I have secured multiple layers of protection and efficiency. My family will not have to endure costly, public vetting procedures. My tax burden is reduced because the trust structure allows assets to flow outside of my taxable estate and, if managed properly, can minimize or avoid estate taxes. For my business holdings, the trust ensures a smooth leadership transition and prevents unnecessary legal battles over ownership. And perhaps most importantly, my children – and their children – will inherit not just wealth, but a plan for responsibly preserving and growing that wealth.

Putting my assets into a trust was one of the smartest moves I've made as an entrepreneur and father. It has given me peace of mind knowing that my hard-earned inheritance is protected, my tax liabilities are minimized and my family's financial future is secure. Creating a trust can seem daunting, but with clear goals, professional guidance, and a willingness to adapt to changing circumstances, you'll find that it's not just a tool reserved for the wealthy. It is a powerful instrument available to all of us who care about it preserving what we have built for generations to come.