What is the primary function of a trust?

The primary function of a trust is to hold and manage assets on behalf of beneficiaries. This framework allows the designated trustee to oversee the assets in accordance with the terms set forth in the trust agreement. Trusts can serve various purposes, including estate planning, asset protection, and ensuring that the wishes of the grantor are honored after their passing. The trustee has a fiduciary duty to act in the best interests of the beneficiaries, managing the assets prudently and distributing them according to the guidelines established by the trustor.

While other functions like providing insurance against losses, investing solely in real estate, or issuing loans might pertain to specific financial strategies or products, they do not encapsulate the fundamental purpose of a trust. Trusts can include diverse asset classes and can be tailored to meet the specific needs of the grantor and beneficiaries, but their core function remains centered on the stewardship of assets for the benefit of others.