Trusts are a way of managing and protecting wealth for you, your loved ones, or your business needs. The primary purpose of a trust is to allow one party to hold various assets, such as money, land, investments, or property, for the benefit of another individual or group.

There are many different types of trust, and they can be set up and used for various reasons.  

Trusts can be an effective way of managing and controlling assets throughout your lifetime and are also a tax-efficient way of passing on an inheritance after your death.

However, trusts can be complicated and often come with significant responsibilities for trustees. If you are considering establishing a trust, specialist legal advice is vital to ensure it functions as it should.

In this blog, our experienced Trusts and Asset Protection solicitors answer some frequently asked questions about trusts.

What is a Trust?

A trust is a legally enforceable arrangement that manages assets (money, investments, land, or buildings) for the benefit of the trust beneficiaries.

The key parties involved in a trust are:

  • The settlor. This is the person who puts assets in a trust and sets out how the assets should be used, usually in a document called a ‘trust deed’.
  • The trustee. The trustee is the legal owner of the assets held in a trust. There can be more than one trustee, and they are responsible for managing the trust. This includes ensuring the settlor’s wishes are followed, paying any tax due, and deciding how to invest or use the trust’s assets. There must always be at least one trustee.
  • The beneficiary. A beneficiary is a person who benefits from the trust.

Why would you use a Trust?

Trusts can form a key part of succession planning and can be used for a variety of reasons, including to:

  • Control and protect assets.
  • Pass on assets to the next generation.
  • Support vulnerable loved ones.
  • Fund education for children or grandchildren.
  • Provide for children and partners from previous relationships.
  • Reduce inheritance tax payments.

A robust and well-structured trust can serve many purposes and has many benefits for everyone involved. However, trust law is extremely complex, and seeking appropriate legal advice from a qualified legal professional is vital.

At Langley Wellington, our specialist trusts and estate planning lawyers in Cheltenham and Gloucester have decades of experience between them, dealing with many different assets in the UK.

As part of your succession planning, we can advise on trust structures to protect assets from inheritance tax (IHT) or life events such as divorce or bankruptcy.

For legal advice from our specialist trusts and estates solicitors, please call 01452 521286, email lawyers@langleywellington.co.uk or make an online enquiry.

What sorts of Trusts are there?

A wide range of trusts are available. Some of the most popular trusts include:

  • Discretionary Trusts.

A discretionary trust is the most flexible form of trust. It allows trustees to decide how much beneficiaries receive from a trust and when they receive it. All capital and income held in trust is distributed entirely at the trustees’ discretion.

Discretionary trusts are popular in estate planning as they can be used to put assets aside for a future need or can protect assets for beneficiaries who can’t manage their own funds, such as children or those lacking capacity.

The trustees of a discretionary trust have a lot of freedom. If you are considering setting up a discretionary trust you must ensure the trustees you choose understand your objectives and will execute their responsibilities in a way that will support your aims.

  • Bare Trusts.

Bare trusts are a form of ‘absolute’ or ‘fixed’ trust and are more commonly used to make gifts to young people. In this form of trust, the settlor allows assets to be held by a trustee on behalf of a specified beneficiary until they turn 18 (in England and Wales).

At this point, the beneficiary is entitled to all the capital in the trust and any additional income received.

  • Charitable Trusts.

A charitable trust is a form of trust where the trustees can only use the capital or income to further charitable causes that benefit the public or a certain section of the public, for example to advance health, promote education, or assist animal welfare.

It is an irrevocable trust, meaning it cannot be changed or modified without the beneficiary’s permission.

Trusts Solicitor Gloucestershire

If you want advice on trusts, speak to Langley Wellington. Our specialist asset protection solicitors will invest time to get to know you to establish what you want to achieve from a trust and suggest the best legal solution tailored to your needs.

An experienced trust solicitor will also be able to ensure the trust is set up correctly and advise beneficiaries, trustees, and settlors on all aspects of trust law.

If you are looking for advice regarding trusts and asset protection, our specialist legal team at Langley Wellington can help you.

Our trusts legal service includes advice on:

  • Family Trusts and Asset Protection.
  • Discretionary Trusts in Wills.
  • Life Interest Trusts in Wills.
  • Trusts Disputes.

If you are a trustee, the responsibilities can be demanding, and professional advice is required to avoid incurring liability.

We offer bespoke legal advice for trustees on their obligations and duties.

To speak with our Trusts and Asset Protection team, please call 01452 521286, email lawyers@langleywellington.co.uk or make an online enquiry.