Frequently Asked Questions: Trusts

A trust is a legal arrangement where a person or entity (the settlor) transfers assets to another person or entity (the trustee) to hold and manage for the benefit of one or more individuals or organizations (the beneficiaries). The trust is governed by a trust deed, which outlines the terms and conditions of the arrangement. In the UK, trusts are commonly used for estate planning, protecting assets, and managing wealth for future generations. Read More

There are several types of trusts available in the UK, including bare trusts, discretionary trusts, interest in possession trusts, and charitable trusts. Each type of trust has its own specific characteristics and requirements, which should be considered when choosing which type of trust to set up. Read More

To set up a trust in the UK, the settlor must transfer assets into the trust and appoint a trustee to manage those assets. The trust must be created through a written trust deed, which outlines the terms and conditions of the trust. The trust deed must be signed by the settlor and the trustee, and in some cases, the beneficiaries. Read More

The tax implications of setting up a trust in the UK will depend on the type of trust, the assets involved, and the income generated by the trust. Trusts are subject to income tax, capital gains tax, and inheritance tax, and the tax treatment will vary depending on the circumstances. It is important to seek professional advice before setting up a trust to ensure that the tax implications are fully understood. Read More

The role of a trustee in a trust is to manage the assets held in the trust and distribute them to the beneficiaries according to the terms of the trust deed. Trustees have a fiduciary duty to act in the best interests of the beneficiaries and must exercise their powers with care and diligence. Read More

The duties and obligations of a beneficiary of a trust in the UK will depend on the type of trust and the terms of the trust deed. Generally, beneficiaries have the right to receive income and/or capital from the trust, and they have the right to information about the trust and its administration. Read More

A trust can be challenged or contested in the UK if there is evidence of fraud, undue influence, mistake, or lack of capacity. In some cases, beneficiaries may also be able to challenge the actions of the trustee if they breach their fiduciary duties. Read More