Trusts - Whitefield Law

Trusts in modern times play an important role in helping protect your wealth for the next generation. It can provide financial protection for your loved ones whilst ensuring that you maintain control.

Trusts also have a reputation for being only ‘for the wealthy’. This is simply not true. Any person who has any asset worth protecting for their loved ones should consider trust planning.

A trust is a formal transfer of assets (money, investments, land or buildings) by a person (known as a settlor) to a specified number of people (known as the trustees) with instructions that they hold the assets for the benefit of others (known as beneficiaries).

In a trust legal ownership remains with trustees and the trustees have day to day control over the asset.

There are different types of trusts and they created and taxed differently.

If a trust is set up in your lifetime, it is called a lifetime trust and takes effect immediately on creation. This is set out in a trust deed.
If a trust is set up to take effect on your death, then the trust provisions must be set out in your will. This is called a Will Trust.

There are number of reasons for setting up a trust.

These include the ability:

to control and protect family assets;
to ensure that your hard -earned wealth passes down the generations and is not subject to dilution through marriage;
divorce or financial debt;
when a beneficiary is too young to handle their affairs;
when a beneficiary cannot handle his or her affairs because they are incapacitated;
to pass on assets while you’re still alive;
to pass on assets when you die (a ‘will trust’)

There are two most common types of trusts are discretionary trusts and life interest trusts (also known as interest in possession trusts (‘IPDI’).

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