If you’ve been keeping up with the news this week, it will have been difficult to miss the furore which has ensued following the closing of hundreds of KFC restaurants up and down the country. The cause of this – reportedly costing the chain...
What is a trust?
A trust is a legal arrangement under which a person gives someone else ( 'trustees') the job of looking after assets such as money, investments and property.
Why should I set up a trust?
If you set up a trust, your trustees will manage your assets for the benefit of someone who perhaps may be too young or is unable to handle their own affairs. Your beneficiary will have the benefit of your assets without the responsibility of managing them.
Who can I appoint as trustees?
You can appoint one or up to four trustees. You should appoint people you trust and who can cope with the responsibility and work involved. They could be family members, long standing friends or a professional such as your solicitor. It is a good idea if one trustee is independent and not a family member or beneficiary of the trust.
Can I give my trustees direction?
You can tell your trustees what you would like them to do by leaving a Letter of Wishes. You can explain why you have set up the trust and how you would like the fund used. The letter is not legally binding but it is a useful guide for the trustees.
What are the trustees duties and responsibilities?
Trustees manage the assets of the trust on a day to day basis - making payments to beneficiaries, preparing accounts, investing fund money and paying any tax due. Sometimes trustees are closely involved in the day to day welfare of a beneficiary.
What is a settlor?
This is a person who puts assets into the trust, usually when the trust is created. It is the settlor who decides how assets and any income should be used.
What is a beneficiary?
This is anyone who benefits from the assets held in the trust. Beneficiaries can benefit in different ways such as income only, capital only or both income and capital.
What is the cost of setting up a trust?
The costs varying according to the size and complexity of the trust and we are happy to discuss costs with you and agree these with you.
A settlor should be aware that the Inland Revenue will require annual tax returns in respect of any trust set up. There can be entry and exit charges and 10 year anniversary charges.
What can be included in a trust?
This is often called 'trust property' and it can include money, investments, land or buildings. Personal items ('chattels') such as jewellery and furniture can also be included.