Trust
A simple definition of a trust is when one person (called the settlor) gives property or as- sets to another person (called the trustee), who then manages those assets for the benefit of a 3rd person or group of people (called the beneficiary or beneficiaries).
If that is confusing, one example would be a parent, putting money in a trust to be man- aged by an investor, for their child. Each trust will have a document created called the trust deed, which outlines how the trust will operate.
Trusts can be powerful estate planning tools, because of the way they allow people to manage their assets, without being named as the legal owner. However, they are a highly bespoke and complex part of law, which if done incorrectly, can attract increased tax ob- ligations and cause unnecessary confusion. For this reason, it is imperative that you seek legal advice before implementing them.
Every Trust Has
- It is a long established fact that readerthe ‘settlor’ or ‘trustor’ – the person who puts assets (money, property etc) into a trust and decides how the assets should be used
- the ‘trustee’ – the person who manages the trust, according to how the trustor ex- plains in the trust deed. They are responsible for the trusts day to day running. Responsi- bilities will include paying of any tax that is due, deciding how to invest or use the trust’s assets etc
- the ‘beneficiary’ or ‘beneficiaries’- the person(s) who benefit(s) from the trust. This can be one person, or multiple people. They may benefit from the income of the trust only (e.g. from renting out a house held in the trust), the capital only (e.g. getting shares in the trust), or both the income and capital.
They are many, however, some of the most commonly used ones are:
- Bare Trust
- Discretionary Trust
- Life Interest Trust
- Charitable purpose Trust
- Non-Resident Trust
Furthermore, when setting up a trust, you have to decide whether you wish it to be either
