Here we offer a brief introduction to trusts, how they operate and what roles trustees and beneficiaries play.

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What is a trust?

Trusts are a way to manage assets. Reasons you might create a trust include protecting family assets when someone is deemed too young to control their affairs, when someone is incapacitated, passing on assets before death or doing so in a will trust.

What are trustees?

Effectively, trustees manage the trust funds and play a crucial role. They manage the assets on behalf of a third person and are responsible for not only the management but also the safeguarding of the assets of the trust. They must do so in accordance with the wishes of the grantor who created the trust. The legal instrument setting up the trust will include specific terms which must be followed.

As a trustee, you will be responsible for paying any tax due from the trust.

What is a beneficiary?

The beneficiary is described in the trust as the person or legal entity which is to benefit from the assets of the trust or indeed receive some of the assets in accordance with the terms. The beneficiary will normally be named in the trust but there may be a reference to future issues where that is appropriate. The beneficiary will receive the benefits set out in the document.

Sam Owens