Trust Solicitors

Trusts are set up to preserve and manage assets on the beneficiary's behalf, such as cash, investments, land, and buildings. A legal framework, known as a Trust deed, is put in place to provide trustees with control and management of the Trust, ensuring the interests of all beneficiaries are protected.

The main benefits of setting up a Trust include the following:

• If you wish to give away assets, a Trust enables you to transfer the ownership of the assets out of your estate while remaining in control of the destination of the funds. On an ongoing basis, you will therefore control distributions to potential beneficiaries.
• Using a Trust means assets can be protected from creditors of beneficiaries and protected from those inexperienced at managing money.
• Managing assets passed to beneficiaries who are too young to handle their affairs. Control is increasingly important here as they may need to be more mature to cope with a windfall.
• If you cannot handle the affairs of someone that lacks mental capacity.
• Saving Inheritance Tax upon your death by making early lifetime transfers into a Trust for the benefit of beneficiaries.

Three main parties are involved in a Trust; a settlor, trustees, and beneficiaries.

The settlor is the person who sets up the Trust and decides how the assets should be used.

The trustees are the persons who manage and administer the Trust. Typically, there should be at least two trustees and no more than four. The trustees are required to handle the Trust and assets. They are required to pay any tax due, decide on the use of the Trust's assets and deal with them according to the settlor's wishes.

The beneficiaries are the persons who would benefit from the Trust. A beneficiary can benefit in three different ways:

• Income only
• Capital only
• Both the income and the capital

The role of a trustee is to hold the Trust property and administer it for the benefit of the beneficiaries. The full extent of the duties of a trustee is governed by the terms of the Trust instrument and the principles of common law, equity, and statute.

The Trustee Act 2000 (TA 2000) clarified the key duties of a trustee:

• To comply with the terms of the Trust
• To take control of the Trust property
• To act impartially between the beneficiaries
• To take reasonable care
• Common Law duty of care
• The statutory duty of care
• Duty to have regard to the need for diversification and suitability of investments. 
• Duty to obtain and consider proper advice. 
• Make investments
• Duty to keep accounts
• Duty to provide information
• Duty to act unanimously
• Duty to consult
• Duty to act personally
• Duty to distribute
• Duty to register on the Trust Register

If the Trust's beneficiaries are young and unable to manage their inheritance, the entitlement could be confined to income, thus preserving the capital value of the Trust assets. A Discretionary Trust would enable the trustees to tailor the distributions according to the needs of the beneficiaries, for example, concerning education.

A Trust can also protect assets against claims by third parties. If a beneficiary of a Life Interest Trust is declared bankrupt, the ability of the trustees in bankruptcy to access the Trust fund would be confined to any income entitlement. In the case of a Discretionary Trust, there would be no such entitlement. 

Life Interest Trusts are also often used to protect children of second marriages or children of surviving spouses. Testators fear predators may be ready to take advantage of the surviving spouse's wealth, including local authorities charged with providing care home accommodation.

Trusts can also be used to protect assets against claims arising in divorce and to preserve entitlements to Local Authority funding of care for the elderly, dependent on recipients' financial assets not exceeding defined levels. Again, a Discretionary Trust would be the appropriate way of conferring benefits rather than an entitlement.

Discretionary, Lifetime Trust and Bare Trusts are the primary Trusts available. Declaration of Trusts are also available to set the distribution of a property on sale where the buyers have provided different amounts towards the purchase price.

Sometimes Will Trusts are used. This is when a person puts in their Will for their assets to be placed into a Trust.

The cost of setting up a Trust in the UK entirely depends on the solicitors you choose to assist with the process. 

At Warner Goodman, we base our Trust fees on the expertise and support required, along with the circumstances of your Trust matter. Our fees can be fixed on a fixed-fee basis for a more straightforward Trust service. However, should the matter be more complicated, we may need to charge an hourly rate per solicitor. 

There is no legal requirement for a solicitor to set up a Trust. However, the wording involved when setting up a Trust must be precise, so it is encouraged to seek the assistance of one. 

For the best chance of a successful Trust and avoiding unnecessary problems, having the advice and guidance of a solicitor is valuable.

Generally, a family Trust solicitor can handle all aspects of Trust matters, including: 

• Drafting a Trust document 
• Providing Trustees with advice on Trust management 
• Acting as a professional Trustee 
• Advice and guidance with Trust disputes, including alternative dispute resolution and court litigation 

It is possible to appoint a professional Trustee, such as a solicitor, to manage a Trust. Should you be interested in the Warner Goodman team managing a Trust, please don't hesitate to contact a member of the team today.