WHAT TYPES OF ASSETS CAN A TRUST HOLD?
- Generally, a trust can hold any type of asset. As a practical matter, however, assets held directly in the trustee’s name should only be passive financial investments. Assets such as real estate, an interest in an operating business or a trading account, should be held indirectly by the trustee through a private investment company (PIC), which in turn holds the assets directly. The assets would be managed directly by the directors and officers of the PIC rather than the trustee. As shareholder of the PIC, the trustee selects the PIC’s directors who in turn select the officers. All these selections are made only after giving due consideration to the wishes of the settlor.
