There are two types of trust, one that is written into your Will, the other which is set up during your lifetime. A trust is a form of more comprehensive estate planning where you can attach specific terms to how your assets are distributed and used.
One of the most common reasons to set up a trust is to provide for a child who is under the age of 18.
Why should I set up a trust?
There are a number of reasons and benefits to setting up trusts for your beneficiaries.
- to control and protect family assets
- to minimise the cost of probate
- to pass on possessions/savings when you die
- if someone is under the age of 18
What is a trustee?
A trustee is the legal owner or owners of the assets held in a trust, you must have at least two trustees and their role is to:
- deal with the assets according to your wishes, as set out in the trust deed or 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 to benefit the beneficiary
If the trustees change, the trust can still continue, but there always has to be at least one trustee.
A trust can also be useful if you have a beneficiary with a mental health condition, physical or learning disability, in receipt of means-tested benefits, unstable marriage or risky business venture and you want to ensure that they will receive the full amount you intended them to.