Trusts and their Administration
What is a Trust?A trust is a term for a legal arrangement where a 'trustee' or 'trustees' are made legally responsible for looking after someone else's assets. The assets which can be anything from property, land, money or shares, are placed in trust for the benefit of one or more 'beneficiaries'.
The trustees are then responsible for managing the trust and administering the wishes of the person who has put the assets into trust, who is known as the 'settlor'. The settlor's wishes for the trust are normally contained within their will or set out in a separate legal document called a 'trust deed'.
What is the Purpose of a Trust?
Trusts can be set up for a whole host of different reasons, for example a Trust would be useful if they are too young to handle their own financial affairs, or if they have learning difficulties or are mentally unable to deal with financial matters. A Trust can also be useful if you want to pass money or property on to someone whilst you are still alive. You could also set up a Trust in order to protect existing family assets.
There are several types of family trusts and our solicitors are able to discuss the options with you and will provide you with the best possible help and advice.
A trustee is the legal owner of any assets which are held in a trust. Their role is to deal with assets of the trust in accordance with the trust deed, manage the trust by paying any tax due etc. The trustee or trustees must also decide how best to invest the assets of the trust. Solicitors are often chosen as trustees as they have a good legal knowledge of how best to administer a trust. In most cases they are at least two trustees.
Although trustees may change, the trust can continue. There must be however at least one trustee in place at any one time.
What is a beneficiary?
A beneficiary is someone who benefits from the assets that are held in trust. A beneficiary need not just be one person but could include a whole family. Beneficiaries may benefit from the trust in different ways for example they may be provided an income from property which has been rented out or interest on an investment. Alternatively they may be provided with an asset or lump sum when they reach a certain age.
Seek Professional Help
Trusts can be complicated and trust administration can also difficult if you are not familiar with the duties involved. There are many things to consider like the preparation of annual accounts and tax returns etc.
Before making a decision regarding a trust or becoming a trustee, we would highly recommend that you speak with one of our solicitors. All the solicitors on our legal panel have a wealth of experience in setting up and administering trusts. They will be able to provide you with expert help advice on what is best for your own situation.
Contact us today for advice.