In light of the recent issues arising from the Universal Trustees Limited liquidation, it seems appropriate to set out some guidance regarding trusts.
For many people trusts seem very complicated and daunting structures. It is true that Trusts are not simple things but then they were never meant to deal with simple situations. Where the goal is simple and the situation leading to that goal is also simple then trusts are not appropriate. Sometimes what you really need is a Will (see Christina’s article on Wills) or a Lasting Power of Attorney (see Jenny’s article on Powers of Attorney). However, for some families, in some circumstances, trusts can be the best way forward.
A trust is a legal structure where a person with assets (the “settlor”) gives those assets to one or more people (the “trustees”) for them to manage those assets on behalf of and for the benefit of one or more people (the “beneficiaries”).
Trustees can be anyone of sound mind over the age of 18. Under some circumstances some people can be disqualified from being a trustee, especially if the trust is charitable.
Non-professionals acting as trustees cannot be paid for their role but it is a role with a great deal of responsibility and a lot of compliance to be completed. Settlors should think carefully before choosing their trustees – they will be asking them to shoulder a heavy burden and to navigate some quite complicated administrative and tax law.
There are different types of trust to fit different circumstances and achieve different ends. It is important that the settlor is clear about what outcome they wish, ultimately, to achieve. Not all trusts fit all needs and sometimes trusts are not the only solution.
You can set up a trust to benefit anyone you please, though most often Trusts are used to provide for minor or disabled beneficiaries where the beneficiaries are not able to manage the assets themselves. Sometimes people set up trusts in their Wills to take effect on death, and sometimes they set up trusts and give away assets while they are alive.
The important thing with trusts is to ensure that you have taken independent legal advice and talked through the options. Trusts are not for everyone but they can be used to achieve certain goals. Coole Bevis’ specialist trust advisers, Leyla Kent and Alex Bowers, can review your Trust and Will arrangements and advise you as to your options. Call 01273 722532 or email email@example.com to set up a consultation.