Understanding Trust Funds
The three key roles that comprise a trust fund are the Settlor (or grantor) that sets up the trust and places their assets within), the beneficiary, who is the person who is to receive the trust fund assets at some point in the future, and finally, the trustee who manages the assets placed in trust.
The main reason a person might choose to establish a trust fund is to create a legally binding agreement that sets out the terms in which assets are to be held, maintained, or distributed in the future. The settlor creates an arrangement that is carried out when they are no longer able to do so (whether it be through illness, incapacity or death).
The trustee of a trust fund acts in the sole interest of the settlor. A trust is created for a beneficiary who receives assets and possibly an income from the trust. The fund can maintain almost any type of asset including money, shares, Government bonds, property and so on. A trustee which could be a person or a legal body, manages the fund in a manner specified by the settlor. This could include provision for living expenses and so on…
What Else Does A Trust Do?
If you put your assets into a trust then they no longer belong to you (provided certain conditions are met). When you die the assets you put into trust won’t, under normal circumstances, be taken into account when your Inheritance Tax bill is worked out. Instead, the assets in trust is not counted as part of your estate for inheritance tax purposes.
Trusts are also a way of controlling and protecting your assets for a beneficiary. A trust takes control of valuable property, cash or high value investments on behalf of the beneficiaries whilst they are relatively young or vulnerable.
Trustees have a legal duty to manage the assets you placed in trust on behalf of the person who will benefit in the end. When you set up a trust you are able to decide upon how it is managed, who gets what and when.
Should I Use A Solicitor To Manage A Trust?
If you want to ensure a trust you have made is managed effectively, it would be wise to use a solicitor to do so. If you have already appointed a solicitor to manage your trust, you need to know that they are still managing the trust effectively. They are responsible for ensuring that your wishes are met and that the beneficiaries are being provided for in accordance with the ways you specified in the terms of the trust.
Trusts are fairly flexible and can often be tailored to meet the beneficiaries needs as they change over time. A good solicitor will be able to offer solutions to all your queries.
Costs Of Making A Trust
There is no definitive statement we can make regarding the costs of setting up a trust. Each solicitor has their own prices for each of the different kinds of trust that available. All we can advise is that you shop around and seek out a solicitor with experience and expertise in the specifics that you require.
Costs will vary depending upon the complexity of what you need and the value of assets you are placing in trust. In addition, you may need help transferring assets into the trust, setting up bank accounts, inheritance tax returns and capital gains tax holdover claims. Fees for these services will be payable on top.