Frequently Asked Questions - trusts
What is a trust?
A trust is a legal arrangement whereby you hand over some of your assets (eg shares, money, property) to be looked after by someone else (known as a trustee), on behalf of another person, (known as the beneficiary.)
You can specify how you want the trust to be administered, and say when the beneficiary is entitled to take possession of the assets in the trust fund. Eg many people leave money in trust for children, for them to take possession of it once they reach a certain age.
Once you have put assets into a trust fund, however, they no longer belong to you and you cannot continue to benefit from them.
There are many different types of trust. We can advise you on the most appropriate type of trust to set up to meet your needs.
Why should you set up a trust?
Common reasons for setting up a trust include:
- to help reduce inheritance tax for your family
- so your beneficiaries can have access to your life assurance polic(ies) without having to wait for the Grant of Probate
- to take care of assets on behalf of children or young people
- to pay for school fees or education
- to reduce your tax burden through careful financial planning
- to look after assets on behalf of someone who is too disabled, sick or old to do it themselves
Who will manage the trust ?
You will need to choose trustees to manage the trust. Trustees need to:
- invest and manage the assets
- keep records and make payments
- administer the trust according to the rules of the trust
- prepare tax returns
- deal with the sale of assets
You can appoint us to act as trustees on your behalf, appoint someone who is financially experienced and willing to act as a trustee for you, or appoint other solicitors or trust companies.
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