Trusts arise in all sorts of circumstances, either created in a person’s lifetime or more commonly arising when someone dies (either under their Will or under the rules of intestacy). A trust places the control of assets in the hands of the trustees who hold those assets under the terms of the trust for the beneficiaries (who may or may not be specifically named). There are many reasons a trust arises. These include beneficiaries who are children and as such are unable to inherit until they reach adulthood (or sometimes a later age, for example 21 or 25), they may be vulnerable or disabled people. A trust may be used because there is a wish to provide for a spouse or partner for their lifetime but ultimately ensure that the capital assets pass on down to children. Alternatively a Trust may be used as a form of tax planning.
If you are appointed as a Trustee then you have a duty to administer the trust properly. If you are taking up a Trusteeship it is a good idea to take legal advice as to what your duties and responsibilities are before taking on the role. Formal documents are required at various times, for example when a New Trustee is appointed and when a Trustee retires.
There are different types of trust and it is important to be aware that many of these are treated as a separate body for tax purposes. It is therefore always sensible to take advice as to the tax treatment of a trust to ensure all Revenue obligations (in relation to income tax, capital gains tax and inheritance tax) are met and taxes paid. It is also advisable to seek advice before taking steps to dispose of, or distribute, assets. In this way the trustees can ensure that their actions are carried out in the most tax efficient manner.
At AMD Solicitors we can offer advice in respect of all aspects of trust work to include:
Advising you as to the creation of a trust suited to your circumstances either in your lifetime or under the terms of your Will.
Guiding and advising you as a trustee as to the administration of a particular trust and your duties and obligations, to include, if required a trust administration service.
Advise you as a beneficiary as to your rights with regards a particular trust.
All our advice is tailored to the individual, as we believe that one size does not fit all.
Last month, AMD Solicitors hosted two probate talks to outline current issues in Private Client Law. The talks are held to inform members of the public about the changing law and there are opportunities to ask questions. We had an excellent turn out last month presenting to 30 people at the Trinity-Henleaze United Reformed Church.
I have been considering the role of a trustee while practising in trust law over recent months. Professional trustees will have many resources available to them which “volunteer” trustees, such as family and friends of the person setting up the trust, may not.
The law of inheritance in England and Wales has changed significantly with effect from 1 October 2014 as the “Inheritance and Trustees’ Powers Act 2014” comes into force. The changes are in the writer’s view generally for the good, though much more could have been done to update and improve the current rules.
May 2014 - A blog by any other name ... (oh, and the discretionary trust)
Week 40 - Taking the next STEP
By Florence Pearce, Specialist Wills, Trusts and Probate Solicitor with AMD Solicitors.