Our trust solicitors help you protect and manage your assets now and for the future. Trusts are a way of managing wealth – money, investments, land or property – for you, your family, or anyone else who you’d like to benefit. 

When you put assets in a trust, they are under the control of an appointed person or persons called ‘trustees’. The trustees then manage the trust according to your instructions, even after your death. 

Why set up a trust?

You may have a family member that you would like to leave money to. However, they may be a minor, you may not feel that they are responsible enough with money, or that individual may be in receipt of certain benefits due to health reasons. A trust could be set up and the trustees would hold the money until the trustees believe they are at a time in their life where they can receive the funds or when they attain a certain age which has been specified by you.

Do you want your trust to pay capital, income or both?

Depending on the type of trust you would like to set up will depend on whether the trust will release income or capital. Most trusts will pay income, as most assets will be invested and pay dividends or interest to the beneficiaries.  

 Most trusts created will have an accompanying side letter which will be addressed to the trustees. This will provide guidance on payments of capital and income.   

If you decide to set up a Discretionary trust, the income will be paid to the beneficiary and if their needs are greater capital may be made available to the beneficiary.  However, if a life-interest trust is created whereby your property is placed into trust only the income will be available for the beneficiary and not the capital.

How do I set up a trust?

You can set up a trust within your will which shall come into effect upon your death.   Alternatively, you can set up a trust within your lifetime, which is known as a Lifetime Trust.

How much does it cost to set up a trust?

If you would like to set up a trust within your will, our fees for a single trust will would be £600.00 plus VAT and our fees for a pair of trust wills would be £1100.00 plus VAT.   

Our fees to set up a lifetime trust would depend on the assets within the trust and the complexity of the trust and would start in the region of £900.00 plus VAT.

How long does it take?

Depending upon the complexity of the trust, we would anticipate to be in a position to send draft documents to you within 3 weeks of receiving your initial instructions. 

Once we have provided the draft documents to you and these have been reviewed and approved by you, we would be in a position to send the documentation to you for signing. Alternatively, you could attend the office to complete the signing procedure.

Types of trusts: which is right for me?

There are many types of trust and the type of trust which is right for you will depend on your circumstances. A member of our wills, trust and probate team will listen to your needs and wishes and will be able to advise you on the best type of trust for your situation.  

For example, a Discretionary Trust allows the trustees to make decisions in relation to which monies are paid out, which beneficiary receives payment and how often the payments are made to the beneficiaries. A Discretionary Trust can be set up to set aside assets for a beneficiary who is not responsible with money or to provide monies for beneficiaries in the future.

A side letter will be prepared to accompany the trust document which will give the trustees guidance from you, the person who has created the trust, as to how you would like the trust to be managed. The side letter is not a binding document however, the trustees must not deviate from the side letter unless they have a good reason for doing so.   

Property trust wills

A Life Interest Trust is usually set up when someone has a husband, wife or partner who is currently residing with them and they want to ensure they can continue to live in the property once they have died but they do not want the whole of their estate to pass to them.   

A Life Interest Trust would ensure the beneficiary can continue to reside in the property until they die and then upon their death the property will pass in accordance with the terms of the will of the first to die.   

If you own your property jointly with someone and you would like to leave the property in trust you must own the property as Tenants in Common, rather than Joint Tenants.

If I need long term care, how will the council view my trust?

Many people may want to put their property into trust to try to avoid care fees in the future as, technically, if their property is in trust it does not form part of their estate and cannot be used for payment of care fees.  

The Local Authority will look at whether you have intentionally moved assets in order to avoid care fees, this is known as deliberate deprivation of assets. If they believe you have attempted to avoid care fees they may challenge the trust.   

When the Local Authority challenges the trust, they will need to show that you knew you might need care in the future and at that time arranged to remove assets from your estate.

We would therefore advise against creating a trust for the sole purpose of avoiding care fees.

Personal injury trusts

A Personal Injury Trust is a trust which contains assets which have derived from an award of damages or compensation for a Person Injury claim. The trust must be established for the sole purpose of benefiting the person who has been injured and therefore, damages which have been awarded to the dependents of a deceased person cannot use this type of trust.

This type of trust may be created to ensure someone who has received an award of damages or compensation can still be eligible for means-tested benefits.

Managing your trust the right way

As a trustee you must ensure you are managing the trust in the correct way. You have many duties namely to ensure the trust is carried out in accordance with the terms of the trust deed/will, the assets are invested, any income is paid to beneficiaries,  keep a record of the assets within the trust and any payments made to beneficiaries, file Tax Returns yearly and register the trust if it falls within HM Revenue & Customs criteria for registering trusts.  

Resolving trust disputes 

Amanda Smallcombe is a member of the Association of Contentious Trust and Probate Specialists (member of ACTAPS) and is therefore highly skilled in dealing with all types of trust disputes.

Why choose Birkett Long for your Trust

We have experienced and knowledgeable Trust advisers, several of whom are members of the professional body Society of Trust and Estate Practitioners. Our advisers will be able to provide you with expert advice tailored to your personal circumstances to assist you in choosing the most suitable Trust for you.        

Birkett Long have been ranked in Tier 1 in the Legal 500 for Personal Tax, Trusts and Probate in Essex for several years running. 

To talk to a solicitor specialising in trusts, please call us on 01206 217350