What is a Trust?
A Trust is essentially a safety deposit box in which you can place assets to protect them. You then appoint trustees to look after the assets for the benefit of defined beneficiaries.
There are a number of different types of trusts and each has their own purpose. Some have different benefits and tax treatments so professional advice is always recommended.
Some of the common types of trust include:
Protective Property Trust (PPT). Download our FREE guide
Vulnerable Person Trust (VPT).
Asset Protection Trust (APT) - This is a lifetime (Intervivos) trust.
Charitable Trust.
What does a Trust do?
Trusts are set up for a number of reasons, including:
to control and protect family assets
when someone’s too young to handle their affairs
when someone cannot handle their affairs because they’re incapacitated
to pass on assets while you’re still alive
to pass on assets when you die (a ‘will trust’)
under the rules of inheritance if someone dies without a will (in England and Wales)
This was taken directly from the Government website.
What is a Trustee?
A trustee is required to act in accordance with the terms of the Trusts and the Trustees owe a duty of honesty, integrity, loyalty, and good faith to the beneficiaries.
The Trustees should act reasonably and fairly towards the beneficiaries, balancing each of their interests, along with a statutory duty of care under the Trustee Act 2000 to "exercise such care and skill as is reasonable in the circumstances."
Are there different types of trusts?
Yes. As you will have seen from the information above there are lots of different types of trust and in succession planning they have lots of different names or abbreviations. We take care to explain all of these to you during a consultation and will explain how it operates should we believe that you need one.
As always, if you have any questions, feel free to reach out to us.