Setting up a trust is a way of protecting assets – money, land, investments, property – for people. It is a legal arrangement where one or more ‘trustees’ are made legally responsible for the assets which have been placed in trust, for one or more beneficiaries.
Trusts may be set up for several reasons:
- To protect family assets
- To pass on money or property whilst you are still living
- To provide for young children who are unable to mange their assets
- When someone is ill or incapacitated
- To pass on money or assets under the terms of your will – a will trust.
There are several types of private trust in the UK and each type of trust may be subject to different tax. Other types of non-family trusts include charities, heritage or business related trusts.
The role of trustees is vitally important. Head of our Wills & Tax Team, Lee Young, explains “Trustees have a legal duty to manage the trust’s assets in the best interests of the beneficiaries. Because of the amount of work a trustee has to carry out they are often paid for their services. If the trust’s assets are mismanaged the trustees are potentially liable. How much a trustee is required to do and how much access they have to the funds should be specified in the trust deed – a simple trust may only require the trustee to distribute income to the beneficiaries.”
Understanding the laws of trust deeds can be complicated and our dual qualified solicitor and chartered tax advisor can advise you on all aspects of setting up a trust in the most tax efficient way. Contact us if you would like a free initial meeting to discuss setting up a trust or preparing or adjusting your will.