“It’s just a simple Will.......why does it cost this much?” It’s very common for people to tell us they only need a “simple Will”. Perhaps: Everything is going to your spouse, or You have two children and you want...
What is a Trust?
A trust is a legal arrangement under which, one person (known as the 'settlor') gives one or more other people (known as 'trustees') the job of looking after assets (such as money, investments and property) for the benefit of other chosen people (known as 'beneficiaries').
Advice and assistance with trusts
At BakerLaw, our qualified and experienced team of Wills, Trusts and Probate lawyers can advise on the creation of a new trust, as well as on existing trusts. Choose the option that best suits you below, for details of our services and how we can help:
I need help with an existing trust
Why should I set up a trust?
If you set up a trust, your trustees will manage the assets held in the trust for the benefit of the people you want to provide for (i.e. your chosen beneficiaries). Your beneficiaries will have the use and enjoyment of the assets in the trust, without the responsibility and control of managing them.
Trusts are used for a wide variety of reasons – often to protect assets for someone or from something; some of the most common situations where trusts are used are:
- to provide for a husband/wife/civil partner after death, whilst also protecting the interests of any children – this can be particularly useful for 'blended families' where there are children from previous marriages/relationships;
- to protect the inheritance of young children until they are old enough to take responsibility for their own finances and affairs;
- to provide for vulnerable relatives who are unlikely to be able to look after their own affairs;
- to help with succession planning in a family business.
Who can I appoint as trustees?
You can appoint between one and four people to be trustees. It is sensible to appoint people whom you feel confident would always act honestly and fairly, and who would cope with the responsibility and work involved in managing a trust. Your trustees could be family members, long-standing friends, or someone independent such as a professional (e.g. a solicitor or accountant). It is often a good idea to have at least one trustee who is independent, and not a family member or beneficiary of the trust, so that they can always provide an impartial point of view, when taking trust decisions.
Can I give my trustees direction?
You can guide your trustees as to how you want them to deal with the trust, such as explaining why you have set up the trust and how you would like the funds to be managed and used. This type of guidance would often be recorded in writing as part of the process of creating the trust. Any instructions or indication of your wishes that you give to your trustees may not be legally binding, but can provide a useful guide to your trustees, so that they can understand your intentions.
What do trustees do?
Trustees manage the assets of a trust on a day-to-day basis – for example they might need to make payments to beneficiaries, prepare trust accounts, invest trust funds, report any income and gains appropriately to HMRC and pay any taxes that may be due. Sometimes, depending upon the nature of the trust and why it was created, trustees may be closely involved in ensuring the day-to-day welfare of a beneficiary.
What is a 'settlor'?
This is a person who creates the trust and puts assets into it.
It is the settlor who decides, at the outset, who will be the trustees and who will be the beneficiaries.
What is a 'beneficiary'?
This is anyone who might be able to benefit from/receive some of the assets held in the trust.
Depending upon the terms of the trust, a beneficiary may be entitled to different types of trust funds, such as being entitled to income only, capital only or both income and capital.
Under certain types of trusts, beneficiaries may only be eligible to benefit from the trust, and may not be entitled to receive anything, meaning the trustees would usually decide which beneficiaries might receive trust assets, how much, and when. The trustees are able to make decisions based on the beneficiaries’ circumstances, taking into account any beneficiaries' needs and the most tax-efficient way of dealing with the trust assets.
What can be included in a trust?
This is often referred to as 'trust property' or 'trust assets' and can include many different types of asset, such as money, investments, land or buildings. Personal items ('chattels') such as jewellery and furniture can also be included.
Setting up a trust
Someone may want to create a trust for a number of reasons. At BakerLaw, we can advise upon the various benefits and implications of setting up a trust. We tailor our advice and approach to the circumstances and wishes of each client, so that we can ensure the end result effectively achieves your aims.
The costs of creating a trust can vary according to the size and complexity of the trust itself, as well as the circumstances under which it is created.
Our fees
We are happy to discuss costs and offer a fixed fee for our charges (where possible) to advise upon the setup of a trust, and prepare any relevant documents. Our standard initial fixed fee for this service starts from £1,500 plus VAT (and disbursements). The service under this fee would commonly include:
- reviewing and considering any background information, queries, or documents provided to us, in preparation for an advice meeting;
- meeting for approximately 1 hour to: obtain a full understanding of your goals and intentions for the trust; advise upon options for the terms and structure of the trust (and their related implications); advise upon the legal duties and responsibilities of trustees, and the practical role they will play; and to answer queries which you may have;
- preparing a full written summary for you (a letter of advice) confirming the advice given and matters discussed in the meeting, for your information and future reference.
Costs tailored to your aims
There are various types of trust that can be created, and the amount of work required to assist with trust creation will depend upon the situation and what the settlor is aiming to achieve. We do not take a 'one-size-fits-all' approach, instead, we listen to what our clients tell us of their circumstances and aims, and tailor our service to suit each individual client. This means the level of our fees for each matter relates directly to the work required for that client, and is adapted to their situation and aims.
If you are looking for advice and assistance with the setup of a trust, please contact us on 01252 733770, or email us at privateclient@baker-law.co.uk and we will be happy to provide you with a quote for our services.
Guidance on an existing trust
Trusts can be created by someone to take effect during their lifetime, as well as in someone's Will so that the trust comes into effect on their death. It is quite common for trustees to be unsure as to their duties and powers in dealing with a trust. This is particularly the case with trusts created under someone's Will ('Will Trusts'), where the trustees may have agreed to act many years prior to the trust actually coming into effect (or in some cases, may have not been aware that they were appointed at all).
The rules on the management of trusts are complex, and trustees can often be caught out by failing to take action in the best interests of the beneficiaries, because they are not aware of all the legal duties and responsibilities that they have as a trustee. This can lead to personal liability for trustees, which might have been avoided if the trustees had taken professional advice on the trust and their role.
At BakerLaw, our team of qualified, experienced trust lawyers can advise upon existing trusts, and guide trustees upon their duties and responsibilities, so that trustees can continue to manage the trust going forward, better equipped to protect the interests of the beneficiaries and themselves.
Our fees
We are happy to offer a fixed fee service for reviewing and advising upon trusts and trust documents, including a face-to-face meeting, followed by a full written summary of our advice, which can be used as a future reminder and guide to the handling of the trust. We can advise trustees or beneficiaries upon existing trust, to help them understand what they are dealing with, and how to take practical steps to ensure the trust is managed appropriately.
Our fixed fee for this service starts from £1,500 plus VAT (and disbursements). This service under this fee would commonly include:
- reviewing and considering any background information, queries, or documents provided to us, in preparation for an advice meeting;
- meeting for approximately 1 hour to: explain the trust rules and structure so that you can understand the 'framework' of the trust you are dealing with; advise upon options for the management of the trust (and potential related implications); advise upon the role and entitlement of beneficiaries, advise upon the legal duties and responsibilities of trustees, and the practical steps that should be taken in managing the trust to protect any beneficiaries' interests and any trustees from liability; and to answer queries which you may have;
- preparing a full, written summary (a letter of advice) confirming the advice given and matters discussed in the meeting, for your information and future reference.
If you would like advice or guidance on a trust, and would like to speak to one of our qualified and experienced trust lawyers, please contact us on 01252 733770, or email us at privateclient@baker-law.co.uk to provide details of your enquiry, and obtain a quote tailored to your situation.
Registering a trust with HMRC – Trust Registration Service
A settlor and trustees should be aware that when a trust is created, it may need to be registered with HMRC on the Trust Registration Service (TRS).
The law as to which types of trust are required to be registered has changed over the years, and the majority of trusts are now 'registrable' meaning they should be registered on the TRS. If a trust is not registered by the required date, HMRC may charge a penalty for failed or late registration.
If you're a trustee, but you are unsure whether or not the trust you are managing needs to be registered, we can review the trust documents and other relevant details, and advise you upon whether your trust is registrable (or if it might be exempt). We can also assist with the registration of the Trust, and provide you with a summary of the registration details which you will need to retain for management of the trust and the TRS, going forward.
Our fees
Where possible, we aim to offer a fixed fee for our services, to give you certainty as to the costs involved in obtaining advice on and assistance with registering the trust. Our standard fixed fee to register a trust is £550 plus VAT (and disbursements). This fee includes:
- Taking your instructions as to the registration of the trust;
- Providing you with a summary of details required by HMRC, to enable us to register the trust;
- Registering the trust on the TRS, using the details you have provided;
- Confirming registration of the trust with the TRS;
- Preparing and supplying you with a 'Trust Registration Summary' pack, which will include all key details for your trust on the TRS, for your retention and future use.
If you would like guidance on the TRS, or assistance with completing a trust registration, please contact us on 01252 733770, or email us at privateclient@baker-law.co.uk.
Contact our trusts solicitors in Farnham, Surrey
Our focus is always to provide our clients with peace of mind, and tailor our approach and advice to the needs of each individual client. For further details of our services, and how our team of qualified, experienced trust lawyers might be able to assist you, please contact us online, via email at privateclient@baker-law.co.uk or at our Farnham office on 01252 733770.
