Family Trusts are set up to combine assets, protect them from creditors and reduce tax exposure during a transfer of assets to family heirs. They are usually established by a single family member or a couple, to be distributed to selected Beneficiaries as outlined in their Will.
The purpose of a Family Trust is to progressively transfer significant assets to the Trust, so that legally the Trustor owns no assets personally, but through the Trust, still has some control over and gets the benefit of said assets.
The assets are given to a Trustor, who holds the money and other property in a separate account. A Trustee, who can be a family member or an outside holding company, administers the Trust for a set period of time. The Trustee is responsible for collecting the money and distributing it at regular intervals to heirs, regardless of whether the original owner is living or dead.
Family Trusts can be set up while one is still alive, with a Declaration of Trust contained in a Trust Deed, or upon death, by the terms of a Will.
Placing assets in a Trust works around the estate tax that would otherwise take a substantial portion of assets during an ordinary inheritance process.
Types of trusts and Living Trusts - HG.org. (n.d.-e). https://www.hg.org/types-of-trusts.html