Explain Trusts like I'm 5

[brainbug]

Hi,

Can anyone explain Trusts like I'm 5 year old - structure, real life day to day usage, requirements, cons, pros, and costs vs a company.

Thanks

 

[scooterguy]

Alright kiddo, imagine you have a big treasure chest where you keep your favorite toys and candies. Now, think of a trust as a magical treasure chest for grown-ups, but instead of toys and candies, it holds money and important stuff.

 

[Sols]

And you give the key to the treasure chest to another kid at your daycare or a kid at another daycare.

There might be a little peephole you can look through to make sure your toys and candies are still in there.

You can tell the kid with the key that they shall give one candy per day to your best friend. Every day, you can look through the peephole to make sure only one candy is taken away. You can watch as the other kid gives your friend the candy.

Once per month, the kid who has the key gets to take one candy.

If bullies want your candy, you don't have any! They might still beat you up a little, but they won't get your candy.

Uh, the 5 year old analogy is starting to fall apart. Playground rules are different.

 

[brainbug]

And you give the key to the treasure chest to another kid at your daycare or a kid at another daycare.

There might be a little peephole you can look through to make sure your toys and candies are still in there.

You can tell the kid with the key that they shall give one candy per day to your best friend. Every day, you can look through the peephole to make sure only one candy is taken away. You can watch as the other kid gives your friend the candy.

Once per month, the kid who has the key gets to take one candy.

If bullies want your candy, you don't have any! They might still beat you up a little, but they won't get your candy.

Uh, the 5 year old analogy is starting to fall apart. Playground rules are different.

Kids are greedy and like candies
How can i trust other kids with the keys to my treasure:
1. being sure they won’t use the keys to steal the candies?

2. Or giving the treasure in the amount i asked and to the people i asked them to?

3. What happens to the treasure if the other kid with the keys dies all of a sudden? How do i get access to it?

 

[scooterguy]

Kids are greedy and like candies
How can i trust other kids with the keys to my treasure:
1. being sure they won’t use the keys to steal the candies?

2. Or giving the treasure in the amount i asked and to the people i asked them to?

3. What happens to the treasure if the other kid with the keys dies all of a sudden? How do i get access to it?

1. You can see through the peephole to make sure rules are respected. If they aren't, you can inform adults, like teachers or parents, and they will punish the kid who has your key for breaking the rules. The adults may also recover your candy (or part of it) and give it back to you.

2. Same as above, there are documents with rules that you and the kid with access to the chest have to sign and follow.

3. It depends on the documents and who the trustee is. Sometimes the kid with the key works for a group of bigger kids, and they will just give the key to another one. In other cases, the trust documents may mention who the successor trustees are. In the worst case, legal proceedings would take place accordingly.

 

[JackAlabama]

Theres a famous country for this in Europe inhabitated by hobbits where the candy stores are being cleaned (all legal of course) and the owners couldnt do nothing but just watch that self sponsored party.

 

[EliasIT]

Some interesting threads for you are available here:
https://www.offshorecorptalk.com/threads/what-about-trusts.27526/https://www.offshorecorptalk.com/th...hat-is-a-declaration-of-trust-revealed.17665/
OLD BUT GOOD & SIMPLE
https://www.offshorecorptalk.com/th...-it-to-setup-a-trust-in-the-seychelles.14560/https://www.offshorecorptalk.com/threads/foundation-or-trust.42761/
https://www.offshorecorptalk.com/th...-–-a-concept-that-can-change-your-life.37015/

 

[Larin]

Maybe a better analogy:

Put your toys in a box and give the box to an adult and give them a list of people you want to have access to the toys.

If anyone wants to take a toy they have to speak to the adult who has them. If they are not on the list, the adult will not give them the toy.

While alive you can usually change the list.

 

[drphantom]

How is it possible to setup a Trust in Dubai, UAE ? I think it is not possible they don't have such body's there