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Trust Services

A look into what trusts are, who needs a trust, and whether you should have one

Protect and control your (or your family's) assets after your death, by setting up a trust to ensure that your estate is dealt with exactly as you specify.

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Frequently Asked Questions About Trusts

What are trusts?

A trust is a legal arrangement for the management of assets. In trusts, the legal title to finances, property and assets is entrusted to a person or people (the trustee, or trustees) with a duty to hold and use it for another's benefit. They are used to move assets out of an individual's name control to then eventually transfer to another party. 

There are three parties involved in a trust. The settlor, the trustees and the beneficiaries.

  • the ‘settlor’ - the person who puts assets into a trust

  • the ‘trustee’ - the person who manages the trust

  • the ‘beneficiary’ - the person who benefits from the trust

What is a trust for? 

Trusts are set up for a multitude of reasons, dependent on the individual's current circumstances. 
Some of these may include; 

To protect and control the assets of a family
When an individual is too young to handle their estate and affairs and requires assistance
When somebody is unable to handle their own affairs, whatever the reason
To pass on your assets while you are still alive
To pass on assets when you pass (This is known as a 'will trust')
Trusts are also used under the rules of inheritance. This is for when an individual dies without a will (In England and Wales)


How trusts work

Setting up a trust means that the money or assets transferred to a beneficiary must be used in the way that is dictated by the settlor (The person setting up the trust). A trust is a legal agreement where one or more persons (The trustees) controls the money or assets that they must use for. 

You can put money, investments or any other assets that you choose, into a trust. Tax may have to be paid, but this is dependent on the trust that is chosen. There are many reasons for choosing a trust, with many people setting them up to benefit children or somebody unable to look after their money. 

Protect and control your assets by setting up a trust.

Why set up a trust?

Contrary to popular belief, you do not need to be incredibly wealthy to have a trust, though it is recommended as it can be costly to set up. A trust can be useful for the organisation of your assets. If you have a substantial amount of assets or have very specific requests for the distribution of your estate after you pass, a trust may be for you. Trusts are often used for reducing estate taxes and protecting your estate. 

Some of the main reasons for setting up a trust are as below;

  • To control and protect family assets

  • If someone is too young to handle their affairs

  • If someone cannot handle their affairs due to being incapacitated

  • To pass on assets while still being alive

  • To pass on assets after death (‘will trust’)

  • Under the rules of inheritance if someone dies without a will (England and Wales)


Types of Trust


Bare Trusts

Bare trusts are often used to pass assets to young people - the trustees look after them until the beneficiary is of a suitable age. 

Interest in possession trusts 

These are trusts where the trustee must pass on all trust income to the beneficiary as it arises (less any expenses)


Discretionary trusts


These are where the trustees can make certain decisions about how to use the trust income, and sometimes the capital.

Accumulation trusts
Trustees can accumulate income within the trust and add it to the trust’s capital. They may also be able to pay income out, as with discretionary trusts.


Mixed trusts


These are a combination of more than one type of trust. Each part of the trust is treated according to the tax rules that apply to each part.

Settlor-interested trusts

These are where the settlor or their spouse or civil partner benefits from the trust.

Non-resident trusts

This is a trust where the trustees are not resident in the UK for tax purposes. There are very complicated tax rules that coincide with non-resident trusts. 

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