Your Family, Your Assets, Your Way
In today’s economic climate it’s never been more important to protect your property, investments and any other assets you may have. Taking advice about how you can safeguard your assets during your lifetime whilst passing on as much as possible to your family after you die makes a lot of sense.
What is a Trust?
Quite simply, a trust is a legal ‘wrapper’ which can hold some or all of your assets. There are different types of trusts and the use of specifics trusts will depend on your objectives for your assets.
One or more Trustees are appointed and they become legally responsible for holding the assets. Assets such as property (or your share of it), land, money or investments are placed in trust for the benefit of one or more beneficiaries.
The Trustees are responsible for managing the trust and carrying out the wishes of the person who has put the assets into the trust (known as the Settlor).
It may be possible for you to retain control over the assets in the Trust during your lifetime. You may be able to sell your property or investments whenever you wish and receive the full sale proceeds.
Your wishes for the trust are usually written into your Will or set out in a legal document called a Trust Deed.
An essential part of succession planning
Trusts can form an essential part of your estate planning by protecting your capital and other assets and maybe providing tax efficiency whilst still allowing your beneficiaries to receive financial support in a controlled way.
The purpose of Trusts
There are many reasons why you may want to set up a trust.
Here are a few examples of why setting up a Trust may be a good idea:
- To control and protect family assets against claims such as matrimonial claims or insolvency claims
- For tax efficiency, perhaps minimising inheritance tax
- When someone is too young to handle their affairs
- When someone can’t handle their affairs because they are incapacitated
- To pass on money or property whilst you are still alive
- To pass on money or assets when you die under the terms of your Will known as a Will Trust
There are several types of ‘family’ trusts and each type of trust may be taxed differently. There are also other types of ‘non-family’ trusts which can be used in other circumstances, for example to help in the administration and future conduct of a business.
Can I retain control?
Once you have decided which assets are to be protected they become the property of the Trust. The Trustees will then have control of the Trust assets. You can, if you so wish, appoint yourself as one of the Trustees however, if at all possible, you should not be a sole Trustee of your Trust. Ideally there should be at least one other Trustee and it is for this reason you must consider carefully who the other Trustee will be.
You may wish to consider appointing Stuart and Stuart Solicitors as a professional Trustee. Having many years of experience managing Trusts, we are well placed to provide an impartial professional service for you.
The role of the Trustees
Trustees are the legal owners of the assets held in a trust. Their role is to deal with the trust assets in accordance with the ‘trust deed’. This includes managing the trust on a regular basis and paying any tax due by the trust. The trustees must also decide how to invest the trust’s assets although this will always be in line with the contents of the trust deed.
The extent of the trustee’s responsibilities will depend on the type of trust it is and our specialist Trust Solicitors in Edinburgh and the Lothian’s will help you arrive at an informed decision about which Trust is suitable for your needs, who to appoint as Trustees and what responsibilities they will have.