A trust is a way of managing assets for the benefit of someone else. Trusts can also be very useful in tax planning.
Trusts can either be set up during someone’s life or on their death.
The Trustees of the trust manage the assets on behalf of the beneficiaries. Different trusts have different rules as to who receives assets from the trusts and when.
The main types of trusts include;
- Bare Trusts
- Interest in possession trusts
- Discretionary trusts
- Accumulation trusts
- Mixed trusts
- Settlor-interested trusts
- Non-resident trusts
All trusts have different tax regimes and can be complex.
The most commonly used trust is the Discretionary Trust. This type of trust allows your trustees to make decisions as to which beneficiary receives what from the trust. Usually, a discretionary trust is supported by a letter of wishes signed by the person who set the trust up (called the settlor) explaining that the trust is for and how they would prefer the trustees to manage it.
Ultimately, as its title suggests, decisions about who gets what are at the discretion of the trustees.
If you are thinking of setting up a trust or you have been appointed as a Trustee of a Trust and need some guidance call us now on 01257 686386.