A trust is a way of managing assets such as land, buildings, money or investments for people. Trusts can be set up in a person’s lifetime. They can also arise on death under the terms of a Will or, if there is no Will, under the intestacy rules if any beneficiary is under 18 years of age. There are different types of trusts and they are all taxed differently.
the person who puts assets into a trust – the ‘settlor’
the person who manages the trust – the ‘trustee’
the person who benefits from the trust – the ‘beneficiary’
What trusts are for
Trusts are set up for a number of reasons, including:
- to control and protect family assets
- when someone is too young to handle their affairs
- when someone cannot handle their affairs because they are incapacitated
- to pass on assets while you are still alive
- to pass on assets when you die (a ‘Will Trust’)
What the settlor does
The settlor decides how the assets in a trust should be used – this is usually set out in a document called the ‘trust deed’.
What trustees do
The trustee’s role is to:
- deal with the assets according to the settlor’s wishes, as set out in the trust deed or their will
manage the trust on a day-to-day basis and pay any tax due
- decide how to invest or use the trust’s assets
- If the trustees change, the trust can still continue, but there always has to be at least one trustee.
There might be more than one beneficiary, such as a whole family or defined group of people. They may benefit from:
- the income of a trust only, for example from renting out a house held in a trust
- the capital only, for example getting shares held in a trust when they reach a certain age
- both the income and capital of the trust
There are many types of trust to suit all circumstances.
If you would like to discuss creating a trust or the terms and conditions of an existing trust then please contact our Private Client Department on 01977 602999 or email us on email@example.com who will be able to provide further advice or information that you need and then arrange for the work to be done for you.