If you have assets such as property or investments, you may have considered setting up a trust to look after them. When you set up a trust it may be to look after your own assets or may be to look after the assets of a loved one – the inheritance of an individual under the age of 18 for example.
So What Is A Trust?
A trust is a legal arrangement to look after assets. Assets that can be held in a trust include property, money, investments, land, buildings, and valuables – often termed ‘chattels’ – such as jewellery, paintings or furniture. Once your assets have been placed in a trust they may be referred to as the trust ‘capital’ or the trust ‘fund’.
When you create a trust, your lawyer will draw up a legal document called a ‘trust deed’. This will make ‘trustees’ legally responsible for the assets that are held in your trust. When you put your assets into a trust – you become the ‘settlor’ of that trust.
Your assets will now be held safely for the individuals that you choose as beneficiaries of the trust. It is possible to choose one or more beneficiaries for a trust.
Why Have A Trust?
Trusts may be set up for a number of reasons, depending on your needs. If someone is too young to handle their financial affairs or has become incapacitated and can no longer handle their finances. When you are writing your Will you may be considering setting up a trust to pass on your assets – a ‘will trust’. Finally, if you are a business owner you may wish to set up a trust fund to create a pension scheme for your staff. These are only a few examples of when a trust fund may be necessary – the circumstances in which you wish to look after some of your assets in a trust may be slightly different.
Trusts can be complicated, and there are a number of different types of trust fund in the UK. Depending on the type of trust you have, the tax implications of that fund will be different. It can be difficult to understand the types of trust that will work best for you and their implications. For this reason it is highly advised to get professional help with your trust administration. You can instruct a lawyer to help you deal with your trust. Their expertise will give you peace of mind and will make dealing with your finances a lot simpler.
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