6 reasons to consider a trust

For many people, being ‘trustworthy’ is a phrase associated with a reliable friend who has integrity and credibility. A ‘trust’ is also a way to manage assets (land or buildings, investments or money) on behalf of somebody else.

When we are looking at setting up a trust for a client, the word is often met with either dislike through bad experience, or uncertainty, which might arise from a lack of understanding. We have spoken to many individuals who did not fully understand trusts and how they or their family might benefit from using them. This is actually a real shame, as trusts can be a powerful ally for a variety of reasons.

1. Tax planning - Trusts can be set up with Income tax, Capital Gains Tax and Inheritance Tax planning opportunities.
2. Succession - Within the trust structure, individuals can look at the ways to pass on their assets to the next generation now, rather than leaving their assets to loved ones in their Will.
3. Protection - If there is the possibility of divorce or bankruptcy within the family, existing trusts may be able to protect family assets making sure the intended person receives them in the end.
4. Flexible – Trusts can be structured with classes of beneficiaries which gives the trustees power to decide who will benefit at a later date.
5. Control – The person creating the trust can be one of the trustees, so can direct when and how assets are distributed, even if they cannot personally benefit.
6. Independence – Individuals can appoint a third party professional representative to act as their trustee, making decisions on their behalf.

Far from being restrictive, modern deeds of trust can be drafted to be as flexible as possible; they can be amended if circumstances change and there is no problem with winding up a trust when it has served its purpose.

We would be happy to discuss in more detail with anyone wanting more information on trusts.