What is the difference between a trust and a corporation?
The difference between a trust and a corporation is that a trust is created by one person, or a group of people, while a corporation is created by a board of directors or shareholders. A trust is an arrangement in which one person or a group of people, called trustees, holds legal title to property for the benefit of others, called beneficiaries. A trust is created for the purpose of protecting, preserving, and transferring wealth to the trust’s beneficiaries. On the other hand, a corporation is a legal entity that is created under state laws and regulated by the government. Corporations are created for the purpose of conducting business activities and making profits. In Washington state, trusts are regulated by Title 11, Chapter 11.88 of the state’s Revised Code of Washington, while corporations are regulated by Title 23, Chapter 23B.20 of the Revised Code of Washington. Generally speaking, trusts often offer more flexibility than corporations, in terms of how the trust is set up and how the assets are managed. This can be beneficial if the trust is used to pass on wealth to beneficiaries in the future. Corporations, on the other hand, have more formalized operations, but can have advantages such as limited liability and tax benefits.
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