What is the difference between a trust and a corporation?
The main difference between a trust and a corporation is the way of management and the way the beneficiaries are treated. A trust is a legal entity created to manage assets for the benefit of designated parties or beneficiaries. The trust is managed by a trustee, who has a fiduciary duty to manage the trust according to the terms of the trust agreement. The trust agreement specifies how the assets are to be used and who is to benefit from them. A corporation is a legal entity formed to conduct business. It is owned by shareholders, who each have a certain number of shares in the company. The shareholders elect a board of directors, who are responsible for making decisions about the company. A corporation is managed by officers who are selected by the directors. The main difference between the two legal entities is the way they are managed. A trustee is responsible for managing the trust according to the terms of the trust agreement and is accountable to the trust beneficiaries for the decisions they make. On the other hand, the shareholders and directors of a corporation make decisions about the company and officers are responsible for carrying out their decisions. Inheritance law in Hawaii treats trusts and corporations differently. Trusts may be established by individuals or entities for the benefit of designated beneficiaries, and the assets and income of the trust are held and managed for the benefit of the beneficiaries. Corporations may be formed for the purpose of conducting business and any profits that the business earns are shared amongst the owners or shareholders.
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