A trust’s beneficiaries are the individuals or entities entitled to its assets or income. They ultimately hold the equitable interest in the trust property, even though legal title is held by the trustee. For example, a parent might establish a trust for a child’s education, naming the child as the beneficiary. The trustee would manage the funds, but the child would ultimately receive the benefit.
Identifying the individuals who ultimately benefit from a trust is crucial for transparency, accountability, and preventing misuse. This information is essential for tax purposes, legal compliance, and combating financial crimes like money laundering and tax evasion. Historically, the lack of transparency surrounding trust beneficiaries has been a concern for regulators and policymakers. Modern regulations increasingly require disclosure of beneficial ownership to ensure responsible financial practices.
