Trusts - Bennett Oakley

Trusts

Protecting your assets with
clear, practical trust guidance

A Trust is a way of protecting your assets for the future. To form a Trust a person (known as a Settlor) places assets under the control of a person (known as the Trustee), for the benefit of another person or people (known as the Beneficiaries) or for a specified purpose (such as education).

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One of the key benefits of a trust is the flexibility it offers. For example, instead of gifting your children a lump sum, which they may spend unwisely, you could place the funds in a trust and include provisions in the Trust Deed to pay them interest on the capital until they reach a specified age of maturity.

The Trustee is legally required to manage the assets in accordance with the instructions set out in the Trust Deed.

Trusts generally fall into two categories:

Fixed Trust – where the beneficiaries and their entitlement to the assets are defined when the trust is created.
Discretionary Trust – where the Trust Deed gives Trustees the flexibility to decide who benefits from the trust and in what proportions.

Why might I want to create a Trust?

There are several reasons to consider setting up a trust:

To ensure assets such as a family business or farm remain within the family
To manage and potentially reduce tax liabilities on your estate (this should always be done with professional advice, as mistakes can be costly)
To put funds aside for specific purposes, such as a university education, a deposit for a first home, or other key milestones for future generations
To protect assets, such as the family home, from being used to pay debts or care fees

What is a Charitable Trust?

A Charitable Trust is created to operate exclusively for charitable purposes. Funds donated to a Charitable Trust are typically exempt from most forms of taxation, making it an effective way to support causes you care about while maximising the value of your contribution.

How we can help you set up a trust

At Bennett Oakley Solicitors our lawyers have many years’ experience setting up and administering often large, complex trusts for many different types of individuals and organisations. Although trust law can involve a lot of legal jargon we will take the time to ensure that you fully understand the process so you can make the best decisions in relation to your interests.

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Looking for legal support? Get in touch with our solicitors, and we’ll connect you with the right expertise to meet your specific needs through our trusted legal team and professional partners.

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FAQ Topics

What’s the difference between a trust and a will?

A will outlines how your assets should be distributed after your death, while a trust can take effect during your lifetime or upon death and is often used to manage assets over a longer period. Trusts can offer more flexibility, privacy, and tax planning opportunities compared to a will alone.

Can I be both a Trustee and a Beneficiary?

Yes, it is possible to be both a Trustee and a Beneficiary, but there must be at least one other Trustee to ensure proper management and avoid conflicts of interest. It’s important to seek legal advice to ensure the structure is legally sound and tax-efficient.

Are trusts only for high net worth individuals?

No, trusts can be beneficial for a wide range of people, not just those with significant wealth. They are commonly used for protecting family assets, supporting children or vulnerable individuals, or planning for future costs such as education or care.

Do trusts help with inheritance tax planning?

Trusts can play a valuable role in inheritance tax planning, but the rules are complex. The type of trust, the value of the assets, and how it’s structured will affect its tax treatment. Professional legal advice is essential to ensure the trust is compliant and effective.