A trust is a relationship between 3 parties in which A (the settlor) transfers assets to B (the trustee) to manage and look after for the benefit of C, the beneficiary. So you have 3 parties involved.
Who are the people involved in a trust?
The three parties are:
- The settlor who is the one transferring assets into a trust.
- The trustees who receive the assets from the settlor and manage it.
- The beneficiaries who are the ones that will receive the benefit from the assets.
How do you set up a trust?
To set it up, a lawyer will draft a legal document called a trust or settlement deed. Once the document has been prepared, the person setting up the trust and the trustees will sign the document in front of witnesses. The legal title to the assets then has to be transferred into the trustees. Once that is done, the trust is complete.
What goes into the trust document?
The document contains a lot of information relating to the trust including;
- Who is setting up the trust (the settlor)?
- Who are the trustees?
- Who are the beneficiaries?
- The asset or assets going into the trust
- The powers of the trustees and the rules they have to abide by.
If you are wondering whether a trust will be suitable for your family circumstances, then get in touch and we will be able to advise and guide you. This is a specialist area and you must get advice before proceeding.