A Trust (also known as a Settlement) is a fund that holds assets held by either individuals or a trust company (known as Trustees) for the benefit of others.
Trusts can be made during your lifetime and are usually evidenced by a Trust Deed. They can also be set up on death in your Will and are normally known as “Will Trusts”. The Trust Deed would normally confirm who are to be the Trustees, who is to benefit and any rules and conditions that the trustees and beneficiaries must adhere to. It would also stipulate the Trust Period which can be for up to 125 years in this country.
Trusts can take various forms. Grandparents may set up trusts during their lifetime to provide for their grandchildren’s` education. A trust may be set up to minimise inheritance tax including in particular relating to pensions and placing life policies upon trust.
Trusts offer control, protection and flexibility. Trustees have statutory and common law duties of skill and care in the administration of trusts. To become a trustee, a person must be aware of his duties which include understanding the terms of the Trust, complying with the terms of the Trust, acting in the best interest of the Trust and its beneficiaries and there must not be a conflict between the Trustees’ obligations to the trust and their personal interest.
There are various types of Trusts including interest in possession trusts (where an individual has a life interest and is entitled to the trust income or the use and enjoyment of a trust property) and discretionary trusts which gives the Trustees power to make gifts of capital and income to a stated class of potential beneficiaries.
At WGS Solicitors we have extensive experience of setting up and assisting with the administration and management of trusts and advising Trustees.