A trust is a legally binding arrangement when a person (the settlor) transfers legal ownership of assets to certain chosen persons (trustees) to be held for the benefit of other persons named by the settlor (the beneficiaries). If your family home is in a trust, for example, you no longer personally own the house, but you can still live in it if that's what the trust deed states and the trustees allow.
“There are different types of trusts, with different purposes. Asset protection, the preservation of wealth, and asset consolidation and management are some of the more common reasons for forming a trust,” says Paula Lines from The Law Shop.
“A trust is not a “legal entity” as such but can pretty much do all that an individual can. It can trade or run a business, invest, hold property, or lend and borrow money. A trust can protect selected assets against claims and creditors. For example, it can protect the family home from the potential failure of a business venture,” she explains.
“Historically trusts were used so people would be able to get rest home subsidies but those gaps have long been closed. It is far more common now to have a trust to provide asset protection or succession of an asset through the generations.”
The creation of trusts is a rather complex area of the law and at the moment, there are a good few changes underway to the Act around trusts. The aim of these changes is to clarify and simplify the process and to make it easier for people to use trusts to manage their affairs.
“Everybody’s needs are different, and our team can take you through issues and clarify potential difficulties. We’ll explain everything to you and ensure that a trust really is the best structure for you. We speak in everyday terms so you’ll understand what a trust is and why you have a trust. It’s all part of The Law Shop’s service, and we can meet in person or via Skype,” Paula says.
If you’re thinking about setting up a trust or need legal advice around your existing trust, or if you have questions or would like more information on the impact the expected changes to this area of law may have on your affairs, contact The Law Shop any time.
The Law Shop team is highly experienced in establishing and maintaining trusts. The first thing they’ll do is check whether a trust is the best option for you and your situation, and they offer a free initial half hour meeting. Just call 0800 LAW SHOP (0800 529 7467) or contact us to find out more.