A family trust is a generic name used for any type of trust where assets are placed for the benefit of the family. A family trust typically will have multiple beneficiaries and will pass assets gradually over time. It is advisable to set up a family trust if you have are concerned about the financial stability of a loved one. Typically, a family trust is used to place assets into a trust and pay out income to the beneficiaries for a set time period. Once the purpose of the family trust has been fulfilled the assets can be distributed.