WHAT IS A TRUST?
A trust is established by the settlor, who places the assets into trust. The trustees become the legal owners of the assets and use their powers to decide on how the assets will be dealt with, providing both flexibility and control over the trust period (which can be up to 125 years). The beneficiaries are chosen by the settlor and will usually be family members: children, grandchildren, their spouses and other close family members, but also may include other individuals or charities.
A trust is an excellent way of managing and protecting assets. There are different types of trusts, each with their own set of tax rules and rates. Trusts can be used for various reasons, including:
- To control and protect family assets
- When someone is too young to handle their affairs
- When someone cannot handle their affairs because they’re incapacitated or there is a risk of outside influence.
- To pass on assets during your lifetime (an ‘inter vivos trust’)
- To pass on assets when you die (a ‘will trust’)