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Disadvantages of a Business Trust The first is theres going to be an ongoing cost to maintain the trust. Another complication you may run into is there are different legal regulations from the IRS regarding how the business has to be treated when its owned by a trust.
Advantages of a Business Trust The first thing its going to do, its going to avoid probate when the business owner dies. The next thing it does in connection with the probate court is also it will reduce any possible estate taxes because again, the business wont be part of your estate.
LLCs are better at protecting business assets from creditors and legal liability. Trusts can handle many types of assets and are better at avoiding probate and reducing estate taxes. In some cases, both an LLC and a trust may be the best way to manage the estate.
A: A trust computes its income tax liability in much the same way that an individual does and is allowed most of the credits and deductions that an individual is allowed. Similarly, deductions not allowed to individuals are not allowed to trusts.
A trust is an agreement that allows one party, known as a trustee, to hold, manage, and direct assets or property on behalf of another party, called the beneficiary. In a business trust, a trustee manages a business and conducts transactions for the benefit of its beneficiaries.
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Trusts are established to provide legal protection for your assets. A trust, in the case of business owners, can be a tool that enables business owners to prevent beneficiaries and potential creditors (including previous spouses) from gaining direct access to assets within the trust.
Typically, business trusts are used for individuals who want to safeguard themselves from creditors, taxes, and lawsuits. Trustees also hold the business title, but beneficiaries receive proof of interest certificates.

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