At it’s core, a trust is a contract between the founder of the trust (sometimes called the donor), and the trustees, wherein they agree that the trustees will administer and look after a bundle of assets for the benefit of the beneficiaries. This is often known as a family trust.
Family trusts are described as inter vivos trusts; in other words, they are established during the lifetime of the planner or client.
Testamentary trusts (or will trusts) are established in a person’s will, and therefore only come into existence on the planner’s death.
Trusts have been, and still are, used very effectively as estate planning tools.
Do I need a Trust?
That depends very much on your circumstances, but in general clients establish trusts for one or more of the following reasons:-
- Estate planning (to minimise Estate Duty)
- Preserving wealth for future generations
- Protecting and preserving assets for vulnerable family members
- Protection of assets from creditors
For a more detailed discussion, please contact Hannah.