A trust is a separate legal entity. The beneficiaries who benefit from distributions made by a trust cannot be held accountable for the actions of the trust. The recommended way to set up a trust structure is to establish a company as trustee to provide asset protection.
The major advantage a trust has over a company or individual is income splitting, this means each year you can choose which beneficiaries receive distributions and the amount of the distributions depending on the beneficiaries other taxable income. Another advantage a trust has over a company is that upon sale of an asset held for twelve months or more, the trust will be eligible for the 50% Capital Gains Tax discount. A trust can also distribute up to $416 to a minor.