# Trusts vs Foundations: the deciding factors Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2020-09-21 Category: LIFESTYLE Category URL: https://financedigest.com/category/lifestyle Meta Title: Trust vs Foundation: Which One is Right for You? Meta Description: Find out the key differences between trusts and foundations, and discover the benefits of using each to manage your wealth and assets effectively. URL: https://financedigest.com/trusts-vs-foundations-the-deciding-factorshtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/untitled-design-2-1736838838436-compressed.jpg) _By **Granville Turner,** Director at [Turner Little](https://www.turnerlittle.com/)_ Establishing a trust or a foundation is a useful way to manage your wealth, protect your assets and take control of your succession planning. However, they often come with an element of confusion, leading to the same questions being asked. So, what is a trust? And how does it differ from a foundation? What are the benefits? And how do I know which one is right for me? Granville Turner, Director at Company Formation Specialists, Turner Little, answer these questions to [give you the confidence](https://www.financedigest.com/how-data-sharing-can-give-brands-confidence.html "How data sharing can give brands confidence") you need, to explore your options further. **What is a trust?** Simply put, a [trust is like a locked box which holds money or other assets](https://www.financedigest.com/u-s-to-move-3-5-billion-in-afghan-central-bank-assets-to-swiss-based-trust.html "U.S. to move .5 billion in Afghan central bank assets to Swiss-based trust") on behalf of a beneficiary. It is created by a settlor, who puts their wealth into the box and locks it shut. The settlor then gives the box to a [third party](https://www.financedigest.com/why-a-replacement-to-third-party-cookies-is-key-to-post-pandemic-recovery.html "Why a replacement to third party cookies is key to post-pandemic recovery"), or trustee, who will keep it safe and watch over the contents inside. Only the trustee (and sometimes the settlor) has the [keys to unlock the box and access the contents](https://www.financedigest.com/publishers-and-brands-view-commerce-content-as-a-key-revenue-driver.html "Publishers and Brands View Commerce Content as a Key Revenue Driver") in line with the terms of the agreement, so only they can distribute the contents to the beneficiary when the time comes. The type of trust will depend on how and when the beneficiary will receive the assets. There are a number of reasons why you may want to [set up a trust](https://www.financedigest.com/markets-slammed-with-noise-investors-trust-tone-to-set-the-record-straight.html "Markets Slammed With Noise, Investors Trust Tone to Set the Record Straight"), from controlling and protecting your family assets to handling someone’s affairs who may be too young or incapacitated. They can also be established for purposes with no beneficiaries, such as for charitable purposes. **What is a foundation?** ![Granville Turner](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/granville-turner-headshot-450x298-1736838838006-compressed.png) Granville Turner Broadly speaking, foundations are non-profit organisations or charitable trusts that provide [funding and support](https://www.financedigest.com/uk-launches-270-million-pound-fund-to-support-green-heating-technology.html "UK launches 270 million pound fund to support green heating technology") for purposes such as education, research, science and nature. Unlike a charity that relies on public fundraising, the funding from foundations typically comes from single individuals, families or [corporations who receive tax](https://www.financedigest.com/irish-corporate-tax-boom-breaks-more-records-in-november.html "Irish corporate tax boom breaks more records in November") deductions for their donations. While foundations are owner-less structures, they are created by a founder, usually with an initial donation (as opposed to periodic donations). This donation is then overseen by a board to ensure they are meeting the foundation’s mission. The benefactors then receive the benefits from the donation; benefactors can be persons, animals and nature. This depends on the type of foundation and their purpose. **What are the benefits?** Trusts and [foundations are similar in the sense that they are both set up to support](https://www.financedigest.com/annodata-renews-sponsorship-with-gll-sport-foundation-helping-deliver-support-to-almost-3000-talented-athletes.html "Annodata renews sponsorship with GLL Sport Foundation, helping deliver support to almost 3,000 talented athletes") one or more benefactors, helping them achieve their goals. For example, you may be helping your child [pay for their university fees with a trust or helping to fund](https://www.financedigest.com/norway-wealth-fund-ceo-denies-pay-discrimination-in-case-by-female-employee.html "Norway wealth fund CEO denies pay discrimination in case by female employee") vital research through a foundation. There are no requirements to identify the founder of a foundation or the settlor of a trust publicly, so you can enter into a private arrangement. And when it comes to maintaining your intentions or rejecting the decisions made by trustees or the board, trusts and [foundations provide](https://www.financedigest.com/new-isla-standards-provide-the-foundation-for-resource-optimisation-efficiency-and-risk-mitigation.html "New ISLA Standards Provide the Foundation for Resource Optimisation, Efficiency and Risk Mitigation") a certain amount of flexibility, allowing you to reserve some power over certain decisions. Each of these benefits makes trusts and foundations useful structures in the context of wealth and succession planning. However, there are a few deciding [factors to consider](https://www.financedigest.com/4-important-factors-to-consider-when-choosing-an-eb-5-visa-investment-project.html "4 Important Factors to Consider When Choosing an EB-5 Visa Investment Project") when looking at trusts versus foundations. For example, while a trust is a long-established concept that is relatively easy to form, bringing with it confidence, foundations can engage in a [wide range](https://www.financedigest.com/exclusive-wide-ranging-solarwinds-probe-sparks-fear-in-corporate-america.html "Exclusive: Wide-ranging SolarWinds probe sparks fear in Corporate America") of philanthropic activities not available through other giving vehicles, such as scholarship programmes and grants. Foundations can also ensure your family legacy is maintained, should you so wish. Ultimately, choosing between a trust or foundation will depend on your personal preferences. You should weigh up your options with help from experienced advisors and consider your charitable and [estate planning](https://www.financedigest.com/why-a-will-is-not-enough-estate-planning-and-your-legacy.html "Why a Will Is Not Enough: Estate Planning and Your Legacy") goals. It may [come down to what you want to gain](https://www.financedigest.com/stocks-shed-gains-treasury-yields-jump-as-fed-signals-rate-hikes-could-come-soon.html "Stocks shed gains, Treasury yields jump as Fed signals rate hikes could come ‘soon’") from your investment, who you want it to benefit, and what the assets will be. **Getting expert help** At Turner Little, we have [years of experience](https://www.financedigest.com/interchangeable-biosimilars-market-is-set-to-experience-6-growth-during-the-year-2021-2031.html "Interchangeable Biosimilars Market is set to experience 6% growth during the year 2021-2031") in delivering specialist advice, professional guidance and help to those wanting to set up a trust or a foundation. We understand that no two circumstances are the same, so we listen to your objectives and offer unique [solutions tailored to you and your succession](https://www.financedigest.com/the-collective-power-of-partnerships-integrating-payment-solutions-to-drive-business-success.html "The collective power of partnerships: integrating payment solutions to drive business success") plan. To find out more, [get in touch with us today.](http://www.turnerlittle.com/) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---