There may come a time where you cannot control your own funds effectively. In these instances, you may want to establish a trust to ensure your money is managed appropriately. Turner Little explains how to set up a trust.
What is a trust?
A trust is a legal instrument through which one or more people (trustees) manage money or assets (trust property) on behalf of other people (beneficiaries). Trusts are recognised as one of the most versatile and flexible vehicles for holding and managing money and other assets.
As Turner Little explains, there are various types of trust such as ‘after death trusts,’ ‘living trusts,’ and ‘specific-use trusts.’ Depending on the type of trust, it may be required to pay taxes to the UK government, so your trustees may be obligated to submit tax returns to HM Revenue & Customs.
Why set up a trust?
Generally, there are two reasons why it may be advantageous to set up a trust. First, it can allow you to provide financial support to someone who, for whatever reason, is incapable of managing their own money. For instance, if you have a child with a mental health condition, setting up a trust with them as the beneficiary will allow you to ensure they are financially supported once you pass away.
Second, a trust can allow you to ensure your own funds are managed appropriately, if one day you are no longer able to look after your own money. Let’s say, for example, that your family has a history of developing a heart condition. By setting up a trust, you can ensure that if one day you develop this condition, a trustee can ensure your financial needs are met.
Setting up a trust
In order to set up a trust, you will need to prepare a Trust Deed. This should list your wishes, beneficiaries and trustees, as well as any rules detailing appropriate trustee conduct. You may also want to name someone to serve as the trust’s protector. This person will not be involved in the everyday administration of the trust. However, you can provide them with the power to veto any trustee decisions, remove and appoint trustees, so as to ensure your beneficiaries are protected.
It is vital that the wording of your Trust Deed is precise, so that you can ensure your trust is managed appropriately on behalf of you beneficiaries. It is advisable to enlist the aid of a specialist when setting up a trust, to ensure you develop an air-tight Trust Deed. Turner Little provides the trust creation services you may require to ensure your money is managed effectively.
Turner Little
Turner Little was founded in 1998 and it has since become a well-established UK based professional Company Registration Agent, Registered Bank Intermediaries and Business Consultants, as well as Trust provider. You can receive our monthly newsletter by signing up using the form below.
