Benefits of setting up a Trust

Benefits of setting up a Trust


The Benefits of setting up a Trust

What is a Trust? A Trust is a legal structure that can manage all forms of assets for people. Some examples include investments, money, land or properties.

Trusts involve three parties;

  • Settlor – the person who puts the assets into a Trust
  • Trustee – the person(s) who manages the Trust’s assets
  • Beneficiary(ies) – the person(s) who benefits from the Trust

Type of Trusts

Bare Trust – A Trust predominantly set up with the intention of passing assets to others absolutely, often used when funds are to be passed on to a young person.

Discretionary Trusts – Allows the Trustees to make decisions on how to manage the Trust and who will benefit from the Trust, based on a group of potential beneficiaries and a letter of wishes from the Settlor to guide them.

Interest in Possession Trusts – This Trust passes on all the Trust income to the person with the interest in possession as it arises but reserves the capital for the ultimate beneficiaries or remaindermen. An example could be a partner having the right to live in a property until they pass away with children inheriting the property ultimately.

Why are Trusts set up?

Trusts can be established for a number of reasons; to control and protect family assets, to manage assets when a beneficiary is too young to manage their own affairs (under 18) or to pass on assets while the Settlor is still alive or when they pass away. Other benefits of setting up a Trust are as follows: –

  • Protecting Assets from Care Home fees – If your partner requires care then you can protect your estate by placing it into a Trust, so they still have access to income and capital if agreed by Trustees.
  • Reducing Inheritance tax (IHT)– transferring property and assets into a Trust can provide a way to avoid or reduce IHT.
  • Flexibility of Assets – Trustees can manage and control how the assets are invested or distributed.

What we can do for you?

At Philip J Milton & Company Plc we can advise on all aspects of your finances and help you to achieve your financial aims and objectives, which could involve the establishment of a Trust, to help you set up and manage assets for now and later in life for the benefit of family and friends. If you would like a professional input into your finances or to discuss your future planning, then please do contact the office to arrange a mutually convenient no obligation appointment with one of our highly qualified advisers.