Trusts an explanation
A Trust is what is known as a creature of equity. It is an unusual concept, in that a trust itself is not something that has legal personality, so it is not like a company which can sue, be sued, and carry its own legal liabilities and responsibilities.
A trust can be likened to a long term contract, and has three basic parties to it, the Settlor(s), the Trustee(s) and the Beneficiary(ies). In crude terms, the Settlor gifts assets to the Trustees and charges them to look after those assets for the future benefit of certain persons (the Beneficiaries). The Trustees hold title to the assets they ‘supervise’, but are not permitted by the law to deal with them as if they were their own.
Once gifted, the assets no longer form part of the general estate (possessions) of the Settlor, whilst the beneficiaries do not own the assets, although they are entitled to benefit from them.
Trusts have many different primary uses, and are exceptionally flexible vehicles for holding and protecting family assets or wealth.
There has been a huge amount of publicity in the UK on the use of trusts, consisting of (in our opinion) a great deal of ill informed disinformation on the part of the Treasury, together with very robust and accurate rebuttal from various trade bodies.
The point that has not changed is that trusts have many potential uses, and a great many of your objectives may be achieved through their use. What has changed is the tax treatment of certain trusts. Our view is that your starting point is:
“Is a trust the right vehicle to achieve my objectives?”
Then the next question is “What is the cost, and am I prepared to pay that amount to achieve that objective?”
We have a combined total of in excess of 100 years in the provision of trusteeship, formation and administration of trusts. The subject is extremely complex, and consideration can only ever be on a case by case basis. We will provide detailed analysis and costing on each situation.
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