What is a Trust?
The principle of a trust is very straightforward.
A trust situation arises when assets are transferred from the owner of those assets to a group of people (or Trust Corporation) with instructions that the transferred assets are held for the benefit of others.
The person or persons transferring the assets is called a Settlor and those who hold the assets are called Trustees whilst those who will benefit from the transferred assets are the Beneficiaries.
The instructions from the settlor to his trustees are normally set out in a trust deed and the assets themselves are held in a trust fund, although, it is not the trust that has legal ownership of the assets, but it is the trustees.
There are many different types of trust dependent on the circumstances and goals of the settlor, however, in most instances, most trusts will be to deal with the financial affairs of the family.
The two most common types of trust that we advise our clients upon and usually are included in the Will, these are:
- A discretionary trust – this type of trust enables the trustees to manage assets for a beneficiary who, for example, may have financial difficulties, may not be able to manage the assets for themselves due to age, or they are vulnerable beneficiaries who may lose state benefits or other financial support.
- A life interest trust – this trust will enable a deceased spouse’s assets to be held in a trust for the survivor for the remainder of their lifetime, ultimately passing to the deceased’s children or other beneficiary.
When creating a Trust it is important to ensure that the trustees are aware and understand their responsibility to correctly administer the Trust whilst ensuring the wishes of the settlor are followed.
In some trusts, it may be advantageous to have a professional trustee to act as an independent person together with the other trustees to mediate over any potential disputes or issues arising during the lifetime of the trust.
Our team at Mark Reynolds Solicitors can advise and help you in the creation and administration of your trust, whether as part of your Will or stand-alone trust. We can ensure that your goals are met and you have peace of mind.
If you are currently a trustee we would be more than happy to discuss issues such as the transfer of assets to and from the trust, administration of the trust, preparing trust accounts, completing trust tax returns as well as the appointment and /or retirement of existing trustees. Simply give us a call on 0800 002 9577, alternatively complete our online enquiry form in the box on the right or by clicking here to go through to our contact page.