Creating and Managing Trusts
There are many reasons why some people create Trusts. Providing for children or grandchildren or for inheritance tax planning are just two examples. Beware of claims that by transferring assets into a Family or Asset Protection Trusts you can avoid care costs. It’s not always as simple as that!
Trusts are very technical. It’s important you completely understand how they work.
Can you explain the basics of a Trust?
Trusts are very technical, but here are the basics. The people who set up the Trust are called the Settlors. Trustees administer the Trust. Settlors are usually also Trustees. Sometimes professionals are appointed as Trustees. Beneficiaries benefit from the Trust. All Trusts contain provisions as to how and when the Beneficiaries benefit. The Trust Deed will also contain a list of the powers of the Trustees.
Once it’s set up, what happens then?
The Settlor transfers assets into the Trust once it’s been set up. This means the assets are then owned by the Trust. The Settlor no longer own the assets. Trustees administer the assets and income of the Trust. They also distribute the assets and income in accordance with the provisions of the Trust Deed.
Is there any accountability?
The Trust Deed sets out as to how these are audited and what expenses the Trustees are allowed to claim.. Usually, the Trustees prepare and review accounts annually.. They can raise any questions at this stage..
When does a Trust end?
A Trust ends when its purpose has been completed. The Trustees then transfer all of the remaining assets to the Beneficiaries and the Trust comes to an end. However, you should be aware – it can be difficult to unwind a Trust once it’s been created.
There’s a lot of hype surrounding Trusts. Don’t be fooled by this, Having a Trust doesn’t guarantee you’ll avoid care costs. Ask yourself, do you really need a Trust? Think about this very carefully. There are a number of options available to you that are much more straight forward. Please get in touch – we will discuss your requirements in detail
Do you need help to create or manage Trusts?
Please get in touch if you need our help to create or manage a Trust