A trust is a legal arrangement where one person or more (known as a trustee) controls money or assets which they must use for the benefit of an individual or group of people (known as the beneficiaries). The person who puts the assets into a trust is usually referred to as a settlor.
Trusts can be used for many things and can be particularly beneficial for children or people with a disability or illness.
For instance, you might set up a trust to support someone that can’t manage their money, so that their needs are looked after if you aren’t around to support them. You can also set up a trust to make sure that your own money is used to care for you at some point later in life.
Natasha Booth,
Head of Private Client
Paul Crowley & Co Solicitors
0151 264 7363
Affiliate Member of the Society of Trust and Estate Practitioners
Natasha Booth,How do you set up a trust?
Setting up a trust can be complicated and it is recommended that you use a solicitor so that no mistakes are made. A solicitor will advise you on the tax issues arising out of the trust, as well as the running of a trust.
Are there different types of trusts to choose from?
Yes, there’s quite a few. Here’s some of the most popular ones:
The trustees look after them until the beneficiary is of a responsible age. This is the simplest form of trust.
These trusts are used where the beneficiary is vulnerable, for example irresponsible with money or under pressure from friends or relatives to spend money.
The damages can including injuries caused by an accident, a criminal act, medical negligence or industrial disease.
The primary purpose of setting up a personal injury trust is usually to enable the injured person, or a member of his household, to be eligible, or continue to be eligible, for means-tested benefits. The cost of setting up a personal injury trust may, in some cases, be recovered from the responsible party and this should be discussed with your solicitor.
Who can be trustees?
Most of the time, trustees are usually family members or friends that you can really rely on, they are often a good choice if they are familiar with the beneficiaries needs. If you’re struggling to narrow it down, draw up a list of people and detail the pros and cons to help you make a decision. Trustees must have the mental capacity, and it is always advisable to have at least 2 trustees.
If you can’t think of more than one person, you can appoint a company such as your solicitors but this will be an added cost.
If the trust is for minors where court approval is required or under the court of protection, at least one professional trustee is advisable.
How much does it cost?
The price will vary depending on the type of trust you set up. Speak with your solicitors first to discuss your requirements and they will detail everything involved, including costs.
Affiliate Member of the Society of Trust and Estate Practitioners