Trusts & Trustees

A trust is a legal arrangement that holds assets (such as money or property) and is administered by Trustees for a beneficiary, or beneficiaries, named in your Will. Trusts are usually setup for the following circumstances:

• For a child under 18 years of age

• For someone with a disability (under or over 18)

• For a relative who requires long-term care

• To reduce Inheritance Tax liability

• To ensure your spouse can stay in the family home and the estate passes on intact to your children upon their death

• To make sure the family home does not have to be sold to pay for long-term residential care

There are several different Trusts, all designed for a specific requirement or person. The type of Trust you set up will depend on what assets you have, how and when you want them distributed and who the beneficiaries are. Trusts also attract different tax rates so, if you Make a Will with Making a Will’s service, be sure to consult your Will Writing advisor to ensure you set up the correct one. Visit our Trusts page for information on the following different types:

A Trustee is a person nominated in your Will to administer and manage your assets that, upon your death, become a Trust. They will become legal owners of the Trust and must manage it in the best interests of the beneficiaries. The powers and duties of Trustees are legally defined and include:

• A statutory duty of care to the Trust’s beneficiaries

• A duty to act in accordance with the rules of the Trust

• The power to make investments that will benefit the Trust’s beneficiaries

• The duty to regularly review investments and take relevant expert advice on how to manage them best

• The duty to make payments from the Trust and to pass the assets to the beneficiary in accordance with the instructions you have set out in the trust deeds

When thinking about who to choose as Trustees you should consider the following things:

• Will they be alive for the required length of time for the Trust, eg. if you are setting up a Trust for your children, will they still be alive when your child reaches 18 years of age?

• Are they honest and trustworthy?

• Is their primary objective the beneficiary’s welfare and future security?

• Are they comfortable dealing with financial matters?

You can appoint up to four Trustees, although it is more usual to appoint two. Remember the more you appoint, the longer it may take to make decisions and carry out actions – plus the Trust’s expenses may increase. A Trustee can also be an Executor and it can also be beneficial if an appointed Guardian is a Trustee.

If you decide to set up a Trust in your Will you should also include instructions as to what happens when the beneficiary dies. For example, you may want any remaining assets to be passed onto other named beneficiaries or be donated to charity.