Trusts are a simple way of managing your assets for either yourself or your family. By putting your assets in a trust, you are effectively putting them under the control of someone labelled a ‘trustee’. The trustee can then manage this trust whether that be during your lifetime or after your death.
What is a trust?
A trust is a legal arrangement where assets are managed. When you set up a trust you will choose those who manage the trust and those who benefit from the trust.
Whilst inside a trust, assets such as shares, properties and money can still earn money. It is then up to the trustee whether the earnings stay inside the trust or are paid out to the beneficiaries.
The trustee has a responsibility to ensure the trust is managed in the best interests of the beneficiaries. They will also be aware of any taxes that might need to be paid. Consulting with a solicitor is the best thing to do if you are new to setting up or running a trust as it may actually be more efficient to receive income from the trust as a beneficiary rather than directly.
What can I put into a trust?
There are many different types of trusts and as long as you own the asset you can put in anything including: land and property, financial assets and life insurance.
Choose whether you want to place all of your assets in a trust during your lifetime or whether you specify any additions in your Will.
How do I set up a trust?
The legalities of a trust are key in terms of how it is worded. Enlist the help of a professional trust solicitor to make sure all your details are correct.
You will need to outline the features of the trust in a document called the declaration of trust. In this document you will be able to state who the trustees are, who the beneficiaries are, which assets will be placed inside the trust and how you would like the trust managed.
Trust law can be complex so it is essential you seek an experienced lawyer to guide you through the process from start to finish.