Reasons for Multiple Trusts:
PRIVACY - Trusts provide privacy. You can keep the details private. Having multiple trusts allows multiple privacy. Each trust has interested participants that are restricted to a single trust.
SAFETY - The risk involved in keeping all assets in a single ownership are very high. It is not wise to own everything with the same owner, regardless of the style of ownership. With different owners, you get increased separation, and separation of risk or attack.
LAWSUIT PROTECTION - A lawsuit that is regarding a single asset will reduce worry, and allow the remaining assets to be transferred, pledged, or sold without involvement.
DIFFERENT MANAGEMENT - You can have different control and chain of authority on one trust over another trust. The risk is then reduced that a manager will not manage as you planned. Reducing or having different powers for each trusts allows for the correct type of asset to be managed by the correct experienced manager. It also allows for the managers to gain maturity and experience. For instance, you could put the experienced mechanic in charge of the cars and equipment, and a different manager experienced real estate person in charge of the residence.
DIFFERENT BENEFICIARIES - Past relationships and the responsibility that remains may be satisfied with a trust limited to that situation. The current family would not be involved or perhaps even aware of that trust. The current family and children would be managed in separate trusts. There is privacy and separation for all.
DIFFERENT PURPOSES - The lifeloong goal of having a safe family residence should not be mixed with investments, or business, or prior ventures. For example, having a trust for education should not have anything to do with medical savings, business, or vehicles either.
DIFFERENT INVESTMENTS - A trust should be completely separate if it is designed to completely manage an investment. In fact, separate trusts for separate investments might be very smart, it the amounts in each investment were substantial. The problems that can occur to a single investment should not interfere with the other investments.
DIFFERENT PARTNERS - When partners become involved, they usually create a business entity or an involved partnership agreement. Again, partnerships are known for the problems that often occur. A parnership can be created with a trust as the partner, or even with a trust as the partnership document, spelling out all activities and distributions.
HOW MANY TRUSTS ARE WORTHWHILE? - Normally, we see individual trusts for each significant asset or special purpose. There is no limit as to how many trusts can be created.
COSTS - The simple plan of a single trust for each asset or special purpose also alows for simple management. Since you are only concerned with the specifics of a single asset or purpose, the review and management are simple also. The costs are about the same for creation and management too. There are similar dedications to creation, management, understanding, review, modifications, and happiness. But, a group of simple trusts are much simpler than a huge document that needs intense review and has many purposes, mixed assets, multiple beneficiaries, and potential conflicts.