Control, protection and flexibility. Establishing a Trust can give you all of these and our experts can help
Trust can be a good way to protect assets and mitigate tax. However, there is often a lot of confusion about why you should establish a Trust and how to do it. That’s why you need the help of our expert team at Bell Park Kerridge – a leading law firm for Carlisle and Cumbria - to guide you through your options and ensure you get the right outcome for you and for the people you want to benefit from a Trust.
What is a trust?
A trust is a separate legal entity which involves a number of roles. The settlor sets up the trust and gives the assets away. Trustees are the legal owners who manage and administer the trust in line with the agreed terms. Beneficiaries are the people who will benefit from the trust.
A lifetime trust is usually evidenced by a trust deed which will set out who the trustees and beneficiaries are, any rules or conditions that determine how the trust will be run and what assets make up the trust fund. You decide what assets you would like to place into a trust, the type of trust and who you would like the beneficiaries and trustees to be.
However, there are many different types of trusts and you need expert advice to ensure you get the trust you need. It will depend on factors including what you want the trust for and the beneficiaries’ circumstances or tax.
Control. Making a trust will provide you with control over who benefits and to what extent from the trust fund (this could be cash, property, or any other assets) in the future. It is possible for you to be a trustee of the trust and have your say, but this is not usually recommended, or you may include certain terms in the trust deed.
Protection. You may decide that you wish to give assets away to family members to reduce the value of your estate for future tax purposes, but you may feel that those family members are not responsible enough and would like an alternative to giving the assets outright. The family members may benefit from the trust fund but without being able to squander the underlying assets.
Flexibility. If your trust allows, your trustees may be able to adapt to the changing circumstances of your beneficiaries. For example, if a trust contains flexible provisions, your trustees may be able to pay rental income from a trust asset to one beneficiary whilst they are studying or taking a career break, or in any other circumstances.
