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Trusts

A. Draw a conclusion about the purpose for Target Corporation’s trust based on the research of Target Corporation.

B. Why would a small business owner want to set up a trust and how could it be used for estate planning purposes?

C. Evaluate the similarities and differences between trusts and corporations. In an attempt to protect income, which would be most suitable for a company?

Answer 1

A)In the United States,Target Corporations stand second in department store retailer.It comes next to Walmart,and it is a component of the S&P 500 Index.Target Corporation is founded by George Dayton.Products of Target Corportion include-bedding clothing and accessories,electronics,beauty and health products,food,jewelry,lawn and garden,pet supplies,shoes,small appliances,toys/games.Target Corporations aims at fulfilling the needs of their customers.Its purpose is to make Target the most preferred shopping destination in all fields by delivering standout values,continuous innovation in their products.

After researching On Target Corporation we came to conclusion they are having a large number of departmental retail stores which are diversified in many countries.They are involved in a variety of products.The main purpose for the Target Corporation's Trust may be summarised below-

-Target corporations wish to reduce their estate and gift taxes

-They wish to provide better protection to their assets from creditors and lawsuits.

-Target Corporations want to put certain conditions on their assets distribution.

-They want to distribute their assets to heirs efficiently without cost,delay and publicity of probate court.
Target Corporation wish to name a successor trustee,who will manage their trust in future.

B)Small Buisness want to setup a trust , because trust create a legal planning in which a person has a amount of property which is hold by a person (House) or Entity (Bank,Institutions)which benefit one or more people. The motive of the trust is to reduce the estate tax and transfer assets to beneficiary.

Used For Estate Planning Purposes:-Generally When people died and no one is staying to maintain their assets and in last period their assets get destroyed. for that the people want to setup the trust because after their death their will be someone who will have control over their assets.

Hire a qualified estate planning attorney- There are many online legal services which can help the small business to create a trust, But since trust can be complicated they may want to work with a trust and a estate attorney.A small business may want to form a trust to provide better protection for their assets.

C)Similarities between Trusts and Corporations are as follows:-

1.Both are Intangible-The Trust concept complex and difficult to understand by many individuals because a trust is a concept and so it is an intangible.On the other hand,Concept of corporation is familier and easier but Corporation is also an intangible.

2.Both operate as a legal 'person'-Trusts and corporations both are engaged in managing business operations and transacting business.Both lends and borrow money for their businesses and thus both astc as a legal "person"

3.Both are engaged in owning property-Trusts and corporations both own property for their business.Trusts own personal and family property of grantor and corporations allow individuals to own property for their business purposes.

4)Both are governed by statues-Both Trusts and corporations are governed by statues and are bind by legal laws to their forms and effect,and both are governed by documentation and has to be formed according to statutory framework.

Differences between Trusts and Corporations are as follows:-

Sr No.		Trusts	Corporations
1.	Defination	A Trust is a organization or a firm which is run by trustees.Trustees carry out their duties of administrating the financial assets of another business or individuals.	A company on the other hand , represents combination of assets and individuals.Main goal of company is to earn profits to increase wealth of shareholders.
2.	Ownership Of Assets	A trust holds tangible and non-tangible assets ,and trust owns the assets that grantors place in the trust for managing its assets.	A corporation owns its tangible and intangible assets for example patents,copyrights,buildings,lands,etc. and it can also own the stocks of other corporations.
3.Control		A trust can only have control on the assets as per the Trust Deeds.In care of revocable Trust,it still cannot control the assets,original control lies in the hands of grantor.In case of irrevocable Trust grantor loses its control on assets but still Trust cannot have full control on the assets.	A corporation can control the assets of other corporation and it has majority voting rights when it holds the majority stocks of other corporations.
4	Purpose	The main purpose of forming the Trust is to provide protection for the assets and other properties of grantor.	Corporations are usually incororated by business man ,whose dole purpose is to manage business activities and to increse profit for business development.
5.	Responsibilities	The trust is responsible to act loyal to the grantor and other responsibilities include record keeping,investment management ,pay medical expenses,gifts and charitable gifts.	Corporations are seperate legal entity.Corporations are responsible for proper functioning of the business with profit as the main business motive and management of shareholders investment and other properties of the corporations.