A Trust is a legal method / process of managing your assets (money, investments, land or buildings). There are different types of trusts and they are taxed differently. The key participants are:

  • 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

Trusts are set up to:

  • control and protect family assets and handle the affairs of someone who is considered too young
  • handle the affairs of someone who is incapacitated
  • pass on assets while you’re still alive
  • pass on assets when you die (a ‘Will Trust’)

The settlor decides how the assets in a Trust should be used – this is usually set out in a document called the ‘trust deed’. Sometimes the settlor can also benefit from the assets in a trust – this is called a ‘settlor-interested’ trust and has special tax rules. Contact us for more information.

The trustees are the legal owners of the assets held in a Trust. Their role is to:

  • deal with the assets according to the settlor’s wishes, as set out in the Trust deed or their will
  • manage the Trust on a day-to-day basis and pay any tax due
  • decide how to invest or use the Trust’s assets

If the trustees change, the Trust can continue, but there must always be at least one trustee.

There might be more than one beneficiary, for example a whole family or defined group of people. They may benefit from: the income of a trust only, for example from renting out a house held in a trust; the capital only, for example getting shares held in a Trust when they reach a certain age both the income and capital of the Trust.

Protective Property Trusts

  • Transfer property ownership into Co-ownership as Tenants-in-Common
  • Trust comes into force on death of first Co-owner
  • Co-owners nominate ultimate beneficiary
  • Surviving spouse remains in property with ‘life interest’
  • Co-owners can sell and move and benefit from income
  • Protects assets against care home fees