Trusts are not new and have been around for centuries. They enable assets, (eg. property, cash, shares or specific items), to be held by nominated persons, (“trustees”), for the benefit of others, (beneficiaries), the trustees having the control as to when those assets are paid out or transferred to the beneficiaries.
The creation of a trust can be by way of a lifetime settlement or by will and can be part of good estate planning by ensuring your estate is inherited by the people of your choice. There are also potential Inheritance Tax benefits in that any assets transferred into a trust during one’s lifetime will not form part of your estate after seven years have elapsed, provided you do not retain any actual or potential benefit from the assets transferred to the trust.
There is nothing to prevent a person who creates a lifetime trust being appointed trustee thus remaining in control of the assets and the decision making. The latter is important in that assets can be protected for minor children, those who are vulnerable, the members of a family who may risk bankruptcy, an unstable relationship or be in need of special care…. the list is not exhaustive. The same circumstances can equally apply to a will trust. Indeed, where appropriate, trusts are a way of dealing with the unknown allowing your appointed trustees to make decisions in light of prevailing circumstances many years into the future. A discretionary element and flexibility can be of great benefit.
Once a trust is created the trustees will have a responsibility to make sure that the trust assets are properly preserved for the benefit of the beneficiaries. This may mean utilising the services of managing agents to look after property, seeking independent financial advice as to the investment of cash, keeping correct up to date records of all dealings, employing accountants to prepare annual accounts and using professionals to make certain the trustees are acting in accordance with their powers and responsibilities set out in the trust document/will and in accordance with the law. The tasks can be onerous, but need to be dealt with correctly.
At Palmers Solicitors we have specialist lawyers who can advise on and assist with the creation of trusts whether during lifetime or by will, the tax implications of the same, the responsibilities on trustees, or the actual management of a trust.
For further information please contact us.
