Types of Trust
There are many different types of trusts available
Here at Hart Brown, we know that the realm of trusts can be overwhelming and determining the right type of trust for your needs can be daunting. Our team of expert lawyers are readily available to guide you through the process. We provide comprehensive advice and guidance on the different types of legal trusts and the process of setting up a trust for a child or grandchildren. Our solicitors will discuss with you your objectives and advise you on the most suitable trust in your circumstances.
Below we explain some of the various different types of trusts:
- A bare trust enables one or more trustees to hold a trust fund for the benefit of someone else (the beneficiary). If the beneficiary is an adult of sound mind they can request for the trust assets to be transferred to them at any time.
- A charitable trust can be set up to benefit the public rather than a specific individual. It can be created during your lifetime or after your death in a will.
- A discretionary trust allows the trustees to decide who from a group of beneficiaries receives what and when. No one is entitled to anything from the trust without the trustee’s agreement. If you are considering setting up a discretionary trust you may want to consider appointing an independent professional who is not influenced by family issues and who will comply with your objectives for the trust.
- An immediate post-death interest trust is created by the will of a person who has died. An example of this may be when a husband dies leaving a will that provides for his wife to receive income from his estate during her lifetime, and after her death for his estate to pass to their children.
- A life interest trust entitles a beneficiary to the income of the trust for a period of time (or for life). When that interest ends, the trust fund passes to identified beneficiaries.
- Offshore trusts are used to reduce tax by setting up a standard trust under the laws of an offshore jurisdiction. These types of trust are most beneficial to non-UK domiciled people before they move to the UK and for asset protection usually where there is a “foreign element”.
- A personal injury trust allows the damages received as a result of a personal injury to be paid into the trust. The damages (in the trust) are then not taken into account in the means-testing process and any entitlement to income support should continue.
- A pilot trust can be used for tax mitigation. It allows assets (usually money) to be received in the future reducing the IHT impact on the beneficiary’s death.
- A family living trust is a revocable type of trust when the grantor transfers their assets to a member of their family. A living will and trust can distribute your assets gradually to your family members over a period of time.
It is important to consider all of the legal, practical and tax implications before creating a trust. At Hart Brown, our experienced team will guide you through the implications and help you set up a trust that best suits your objectives. We can also act as trustees of the trust.
Looking to find out more about the different types of legal trusts available? Call our dedicated team on 01483 887766, email info@hartbrown.co.uk, or start a live chat. We will be more than happy to explain your options to you.