A Trust is a legal arrangement where someone looks after assets (the Trustee) on behalf of one or more potential beneficiaries.
Why use a Trust?
A Trust can be a very useful way or protecting an asset for the future benefit of named individuals, the beneficiaries. For example, a Trust would have to be setup if the beneficiaries of a Will were under 18, as legally they can’t inherit until then.
Discretionary Trusts can also be created to protect “attack”. The person setting up the Trust (the Settlor) can “give away” the asset but retain some control via the Trust document. Importantly the beneficiaries of a Discretionary Trust have no “right” to the Trust assets as it’s at the discretion of the Trustees how and when the assets are distributed. For example, if a potential beneficiary were to get divorced it could not form part of the settlement. The same principle applies for venerable beneficiaries e.g. disabled or reckless individuals.
Could a Trust be useful for you?
Trusts are complex and have potential tax implications, if a Trust is right for you depends on your personal circumstances. You should seek professional advice in all instances.