What is a Trust Fund and Should I Set One Up?

Barker Son & Isherwood LLP


Phone 01264 353411

Email info@bsandi.co.uk

A trust fund is a way of managing items such as money, property or investments among other things. You could think about it as giving some money to someone to look after for you, but if you did that they could spend it, so instead you set up a trust fund so the money is looked after in the way you want it to be.

There are a number of different reasons for setting up a trust and there are a number of different types of trusts to choose from, however, before making any decisions about making a trust you should seek help from a specialist financial advisor about the financial implications and ask a solicitor to set up your trust for you.

A trust fund can be set up for very different reasons, such as:

  • Giving some of your assets away whilst you are alive
  • Giving some of your assets away after you die (a Will trust)
  • If you or a loved one can no longer make decisions because you are incapacitated
  • If someone is too young to manage the assets
  • Controlling family assets

All of these reasons for setting up a trust offer protection of the assets put into trust. In order to set up a trust, there are three roles in this process. The first is the settlor. This is the person who has the assets and wants to set up a trust. The second is the trustee. This person is the one who will manage the trust throughout its lifetime and the final role is the beneficiary, who will benefit from the trust.

Some of the main benefits of setting up a trust are the different tax levels with each trust. This is why it is really important to receive proper financial advice about which one works best for you and your beneficiary. In addition, it is really important to consider the implications of Capital Gains Tax or Inheritance Tax on the trust, as these may alter the choice of trust fund chosen.

Once you have decided on what type of trust is most suitable, you should seek advice from a solicitor who has experience in setting up trusts. They will draft the documentation for you and also offer you advice on whether you need to make a Will or review your existing one as a result of the trust. A trust can be a very good way of making your assets tax-efficient and ensuring they are protected, but getting the best possible advice is crucial.

If you would like to speak to one of our experienced team about setting up a trust, please call our Andover based expert solicitor Gareth Horner on 01264 325834 who will be happy to help.

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