What is a trust?

Trusts are created to deal with a variety of situations, such as for the benefit of a vulnerable person requiring guidance, to mitigate inheritance tax liability, to plan the succession of a family business, or to secure funding for school fees for example.

There is a number of different types of trust for each situation, with different tax treatment and provisions to best suit the beneficiaries’ needs, and the wishes of the person making the trust.

A Bare Trust, for example, is often created for a child under 18 and is relatively straightforward to administer with low running costs.  This type of trust means that the beneficiary will become automatically entitled when they reach 18.  A Life Interest Trust provides a beneficiary with an immediate interest in the income or occupation of a property, whilst securing capital for a different beneficiary.  A Discretionary Trust, on the other hand, gives trustees flexibility, allowing them to use their discretion to determine when and who receives a share of the trust fund.

To find out more about how to set up a trust or if you have any questions, please contact us.

Joanna Millican
01206 217360
joanna.millican@birkettlong.co.uk

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.