Where There’s A Will There’s A Way (To Effectively Plan An Estate)
02/02/2012
In the UK almost 30 million people do not have a will and make the common assumption that when...
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Trusts
In tax- and succession- planning arrangements trusts act principally as a means of passing on the economic ownership of wealth to future generations without also passing on the outright control of that wealth.
Trusts & Trustees
In simple terms, a trust is an arrangement whereby certain persons (the trustees) hold money or other assets for the benefit of certain individuals (the beneficiaries). The trust document will appoint the first trustees, describe who the beneficiaries are, and set out the rules relating to the distribution of both the income and capital of the trust. Assets cannot be left in trust for ever however under current rules a trust can last for up to 125 years.
Trusts are often established under a will, as an intermediate holding mechanism where the intended recipients of the testator’s estate are considered too young or immature to inherit absolutely until a future date. A trust can also be a way of dividing ownership between different recipients of the testator’s estate – as where, for example, a testator leaves his estate in trust to be enjoyed by his widow during his life, but with the proviso that the estate should pass intact to his children on his widow’s death.
Trustees often have considerable discretion over how they benefit the intended beneficiaries of the trust, and how they invest the trust assets. Accordingly, one of the most important decisions when making a trust is to decide who should be the trustees. Sometimes, it is appropriate for one or more independent trustees to be appointed and, where this is the best course of action, partners in the DWF private client team will act in this role. The person who establishes the trust will also often leave a note of his wishes to guide the trustees.
For more information about setting up a Trust or being a Trustee please contact our Private Client Team.
