A trust is a contract between a grantor and a trustee, which shields all assets from any federal tax and permits the small business owner to pass on his business without incurring tax liabilities.

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Quizplus · Accepted Answer

A trust is a legal arrangement where a trustee holds assets for beneficiaries, but it does not automatically shield all assets from federal taxes or eliminate tax liabilities when passing on a business. Tax implications depend on the type of trust and specific circumstances.

A Trust Is a Contract Between a Grantor and a Trustee