The concept of the trust is deep rooted in English history. Today, trusts continue to be a valuable and flexible tool in effective wealth structuring and succession planning for individuals and their families. In a changing political and economic climate, trusts remain an exceptionally resilient and flexible device and increasingly are used by individuals and families to protect and manage their wealth.
To create a trust, the 'settlor' gives a particular property or assets to 'trustees'. Almost any asset can be transferred into a trust, including real estate, investments, interests in private companies and intellectual property rights; this is the 'trust fund'. Those trustees, who can be individuals or a corporate entity, will legally own the trust fund, but own it on behalf of someone else: the 'beneficiaries'. The trustees are under an obligation to manage the trust fund for the benefit of the beneficiaries or, in the case of a charitable trust, for charitable purposes.
Trusts can be may be used for a variety of purposes such as:
- protecting assets for young beneficiaries who perhaps lack the experience or the maturity to manage large sums of money, or where you are concerned about them becoming involved in divorce proceedings or becoming bankrupt in the future,
- mitigating tax and in particular, inheritance tax, when used as part of a wider review of your personal affairs,
- allowing you to direct how assets in trust are distributed even beyond your death, so that your trustees can respond to changes in circumstances of the beneficiaries and you can be sure that they continue to be provided for if necessary,
- providing for vulnerable or disabled beneficiaries,
- and ring-fencing assets so that they are not taken into account in means tested benefits, for example where an elderly surviving spouse requires full time nursing care.
For more information on how trusts can be a benefit to you and your family please call us on 0345 111 5050 to speak to one of our expert lawyers.