Can a trust own a business?

Answer 1

Yes. In many cases, it is the same as owning stock. In the case of small, closely held businesses, the trustee becomes involved in the management of the business and may require detailed financial statements on a regular basis.

When I was a trust officer of a Baltimore-based bank, we had a committee that oversaw the management of closely-held businesses owned by trusts.

Having a trust own a business can often cause resentment by family members running the business. Make sure this is what you want before you get into having a trust own a business. Trustees must consider the interests of not just the income beneficiaries of a trust, but also the remaindermen. Often family members employed by closely-held businesses look on the business as providing them with an income and certain perquisites (company car, country club membership) as an entitlement, rather than actually being "earned" -- often causing conflict with the trustee.

Determine what your goals are in having a trust own a business before you discuss this matter with your attorney and accountant.

Answer 2

Own the same assets as an individual

Answer 3

Generally, yes.