You may have heard of the term ‘legal trusts’ before; there are many different types and the Cambridge dictionary defines a trust as “a legal arrangement in which a person or organisation controls property and/or money for another person or organisation.” But exactly what trusts are available and how can Flackwoods Solicitors help you further? Here are the most popular type of legal trusts that you might come across:
Related Property Trusts
Related Property Trusts (formerly known as Discretionary Trusts) are put into place when the trustee is able to make certain decisions about how best to use the trust income and which beneficiary to make payments to. These are the most popular type of trust, used primarily to aid the set-up of putting assets aside for, perhaps, future financial aid for a loved one. Another reason you might take out a Related Property Trust is if you aren’t capable or deemed responsible enough to handle financial dealings yourself. The most important factor of a Related Property Trust is that the trustee can make the decisions themselves.
Life Interest Trusts
Also known as an Interest in Possession Trust, this is established to give the beneficiary the right to receive any income (after expenses) from the trust. This is normally a lifetime right and on their death, the trust fund passes to the other named beneficiaries. There are a few reasons why you might wish to take our a life interest trust:
- To protect your assets if your spouse remarried after your death
- If you’re in a second marriage with step-children but ultimately want to pass any assets to your own children
- To keep the family business just that; in the family
This type of trust can hold most asset types including cash, investments and property.
Trusts for the Disabled
If a trust beneficiary is disabled, trustees can sometimes get special tax treatment, introduced in 2005, subject to certain conditions. From Alzheimer’s and dementia to depression and autism, many medical disorders qualify for a special tax disabled trust.
Unlike other trusts, a Protective Trust is designed to protect the beneficiary rather than the settlement or assets themselves. In short, a protective trust ensures that any beneficiaries are not shortchanged when it comes to wills and other legal settlements. It’s regarded as a rather old-fashioned type of trust these days but allows for individuals to feel safe against any wrong-doing.
If you want to learn more about the range of trusts available and need some advice, give Flackwoods Solicitors a call on 01403 738777 or email firstname.lastname@example.org.