Setting up a Trust

A trust is a legal arrangement where you (the ‘settlor’) assign one or more people (the ‘trustees’) to look after money or assets that must only be used for the benefit of one or more beneficiaries.

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If you want to put some money aside for a specific reason, whether it’s to help your child buy their first home or to cover your own medical expenses if you’re ever diagnosed with an illness, setting up a trust can help you do so in an orderly fashion. 

By setting up a trust, you grant someone else the legal right to manage the assets inside that trust in a way that adheres to your personal requirements, including money, properties, businesses, and life insurance policies. 

Legally, the assets within the trust can only be used in accordance with your wishes, and must benefit the ‘beneficiaries’. 

 

What is a trust?

A trust is a legal arrangement where you (the ‘settlor’) assign one or more people (the ‘trustees’) to look after money or assets that must only be used for the benefit of one or more beneficiaries. 

The assets within the trust are known as ‘trust property’, and can only be used in line with the specific rules set out by the settlor when the legal arrangement was made. So, for example, you might open a trust consisting of £20,000 in savings for your child that can only be released when they turn 21, or when they are ready to put a deposit down on a house. 

The trusts store the property until the requirements set out by you are met, following which, the trustee(s) can release it to the beneficiaries. 

 

What are beneficiaries?

As the name suggests, the beneficiaries are the people who benefit from the trust property. 

This can be anyone – including your child, spouse, close friends, or even the settlor (yourself). The beneficiaries must be the only people that gain any sort of benefit from the trust, but the trustee(s) need to ensure that the property is used in accordance with the trust’s rules.

For instance, if a father puts a lump sum in a trust with the intention of the payout going to his children when the youngest child reaches 18 years of age, the children are the beneficiaries. 

 

What are trustees?

A nominated trustee is the person or company that manages and eventually distributes the assets within the trust on behalf of you, the settlor, and the beneficiaries. You can choose more than one if you wish, and the trustee can be a family member, close friend, company, or a solicitor. Which type of trustee(s) you opt for depends on your personal preferences, but there are some things to keep in mind when making your decision. 

Choosing a relative or friend comes with its risks – you must be able to trust them with the trust property and there are a lot of legalities and paperwork involved, which they may not be accustomed to.

Instead, you may be better off choosing a solicitor as your nominated trustee (or at least one of them), as their knowledge of trusts, the legal documentation and formalities reduces the risk of your trust losing value.

Here at Wills Services, our trusted partners are not only ready and able to help you set up a trust, but they can also manage that trust on your behalf as a nominated trustee. Simply select the service during your online application and we’ll be in touch at a time that suits you, for free and on a no-obligation basis, of course.

 

Why set up a trust in the UK? 

You can put just about any sort of asset in a trust, but it does depend on the type of arrangement you have set up. You can put your life insurance policy in trust, or general assets such as savings, investments, properties, and businesses that would benefit the beneficiary. 

Rather than simply giving someone a lump sum of cash and hoping that they use it the way you want them to, setting up a trust allows you to guarantee that your assets will be used in line with your requirements.

Trusts generally help protect your assets and loved ones from various costs and loopholes, including taxes (inheritance tax, especially), bankruptcy claims, care home charges, divorce settlements and complications involving future marriages.

Your assets are safe within your Wills Services trust, and we will guide you through the whole process in a way that is straightforward and hassle-free.

 

What are the different types of trusts?

The main types of trusts can be broken down into two simple categories – revocable trusts and irrevocable trusts. Irrevocable trusts cannot be revoked or changed in any way once they have been arranged, whereas revocable trusts can be amended and updated as and when is needed. 

There are many other types of trusts, but it’s not important that you know the difference between all the types available, as our team of expert advisors can explain each of your options and help you choose the most suitable one for your situation. 

 

How to set up a trust with Wills Services 

To start your trust or to discuss the possible routes you could take to help secure your family’s financial stability (and your own), simply complete our short contact form and one of our team will be in touch to progress.