The use of a trust is a good way to protect your assets, both while you’re alive and after you die. The legal ownership of your assets is given to the trust, who then manages them on your behalf, while you continue to enjoy the benefits of them.
Settlor – whoever creates the trust. For example, you would be the settlor if you decided you wanted a trust. There can be more than one settlor and they can appoint and remove trustees.
Trustees – the people managing the trust. A settlor can be a trustee, although you may decide to appoint an independent trustee such as your legal company, or someone who has experience of acting as a professional trustee. Often there is more than one trustee.
Beneficiaries – whoever benefits from the trust.
What are the benefits or a trust?
Your assets are protected against claims and creditors. This can be useful for anyone entering into a new business venture. By putting, for example, your family home into a trust, it is protected against the failure of the business.
You can set aside money for children or grandchildren, perhaps for their education or their own business ventures in the future. You can also ensure that your children, and not their spouses, hold onto their intended inheritance.
A trust will also protect your assets after you die, so that no unwanted claims from former partners or relatives not named in the list of beneficiaries can be made.
A trust can last for a maximum of 80 years, so your next of kin can continue to reap the benefits after you die.
Trusts often include things like money; property; shares; valuables such as artwork, antiques and precious metals; patents and copyrights and any other valuable collections.
A trust is the perfect way to manage the financial affairs of a child or minor who has little to no pecuniary experience. They also provide an immediate, probate-free transferring of assets after death.
The legal document that formally sets up a trust is known as the Trust Deed. In it, the trustees are appointed, beneficiaries named and administration/management guidelines are stated.
Setting up a trust is a long and complex business. If it is not well managed or maintained it can cause huge inconvenience and financial loss to you. At Prestige Tax and Trust Services, we can help you go through the process in a stress-free manner.
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