What is the primary purpose of setting up a third-party self-settled trust?

The primary purpose of setting up a third-party self-settled trust is to provide managed financial support while also protecting assets. This type of trust allows individuals to place their assets in a trust that is managed by a trustee, who administers the trust according to the terms set forth in the trust agreement. This structure can help shield assets from creditors, ensure that funds are managed appropriately for the benefit of the beneficiaries, and provide ongoing financial support in a way that aligns with the intent of the person establishing the trust.

In this context, the trust serves as a mechanism to retain control over how assets are utilized and distributed while also providing safety and financial management that may not be achievable through direct asset ownership. This is particularly important for individuals who might need assistance in managing their finances due to various reasons, such as health issues or other limitations.

The other options, while they have their merits in different contexts, do not align as closely with the primary objectives of a third-party self-settled trust. For instance, distributing wealth among family members relates more to inheritance planning rather than asset protection and management. Investing funds in business opportunities is more focused on entrepreneurial ventures rather than asset safeguarding, and simplifying inheritance processes typically pertains to will and estate planning rather than the specific