Lifetime trust creation
A trust is essentially a way of placing the ownership of assets in the hands of chosen individuals (trustees) who look after those assets for others (the beneficiaries).
After the assets are transferred to the trustees, the trust will set out the rules within which the trustees must act and there may also be some guidance offered to the trustees by placing a letter of wishes with the trust document.
There are also many statutory rules and duties that trustees must follow in relation to how they administer the trust assets and they have responsibilities towards the beneficiaries known as a duty of care .
The most common ways for a trust to be created is either in a will or by expressly making a trust during a person’s lifetime as a standalone document. There are other ways a trust can be created, for example as a result of a promise to pass assets to someone, by contributing to the purchase of an asset or through statutory provision (for children under 18 for example).
There are several benefits of creating a trust including:
- Controlling when assets pass to children and grandchildren.
- Managing wealth within a marriage to protect assets.
- Holding death benefits from life insurance or pensions
- Inheritance tax planning.
- To assist with the sale of business property.
- Creating a fund for a charitable purpose.
Care must be taken not to trigger unintentional tax liabilities when creating a trust. Please contact us to discuss your circumstances.