Simply put, a trust is a relationship in which a person, called a settlor, transfers something of value, called an asset, to another person, called a trustee. The trustee then manages and controls this asset for the benefit of a third person, called a beneficiary.  An asset is any kind of property.

There are several different types of Trust Deeds. The most common being either a Discretionary Trust (sometimes called a Family Trust) or a Unit Trust.

You can create a trust in several different ways. You create a trust automatically in your will when you leave assets to children but in the care of another person till those children become adults.

The other common way of creating a trust is by way of a document you sign which is called a Trust Deed.

Through this deed you can nominate another person to look after assets for the benefit of other people. This person is called the Trustee and becomes the caretaker of those assets for the Beneficiaries.

The Trustee can be a company or an individual. You can appoint yourself as a trustee and you can also appoint yourself as a beneficiary of the Trust.

Ultimate control of the Trust rests with the Principal of the Trust. The Principal has the power under the Trust deed to remove or appoint new Trustees of the Trust.

Careful planning and consideration needs to be undertaken when choosing a Trustee. The Trustee of the Trust has wide powers under the Trust Deed to deal with the assets in the Trust.  The major difference between these two types of Trust Deed is the method of distribution of the income and assets of the Trust.

There may be some tax minimization benefits to you through the use of a trust. Not many people understand what a Trust is and how it differs from a Will. There are many types of Trusts, but the one main benefit of all Trusts is how they will keep your estate out of probate after your death.

 

Rea & Sockhill has the knowledge and skill to guide you through the many choices and legalities in the establishment of your Trust.

If you would like to know more about Trusts or discuss whether a Trust Deed could be of benefit to you, please contact us for an appointment.

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