Question

Which of the following would be reasons that someone would create a trust?

1) To leave property to someone who may not be capable of managing the property.
2) To avoid tax burdens on the property.
3) To ensure that the property in the trust is distributed over time, instead of a lump sum.
4) All of the above

Answer 1

A trust can be created for several reasons, including leaving property to someone incapable of managing it, avoiding tax burdens, and distributing the property over time instead of a lump sum.

Step-by-step explanation:

A trust can be created for several reasons:

1. To leave property to someone who may not be capable of managing the property: A trust can be established to provide for the care and management of property on behalf of someone who may be too young, inexperienced, or incapable of handling the property themselves.
2. To avoid tax burdens on the property: By placing property in a trust, individuals can potentially minimize or eliminate estate taxes and other tax burdens that may be imposed on the property.
3. To ensure that the property in the trust is distributed over time, instead of a lump sum: A trust can be structured to distribute the property over a period of time, providing for the ongoing financial needs of the beneficiaries and protecting the assets from being mismanaged or wasted.

Therefore, the correct answer is All of the above.