What Are Trusts?
Trusts. What Are Trusts?
The use of trusts date back more than a thousand years. Today’s trusts offer benefits of asset protection and reduced taxation by moving the legal ownership of assets into a trust environment. The person transferring the assets is known as the settlor. Those who benefit from capital, or receive income, are known as the beneficiaries. Trusts enjoy special rules, and, if set up in the correct tax jurisdiction, can benefit from a reduced or zero tax environment, as well as protecting assets from professional negligence, divorce and creditors.
UK law offers protection for trusts under special legal provisions, many of which were introduced over three centuries ago. Nevertheless, given the ongoing evolution of trust laws, we include a facility in our trust mechanisms that allows for additional protection to be implemented for trusts as needed. Simply put, this ensures that if there is a change in the law that carries potential ramifications for our trusts, our lawyers will move to make amendments to the trust and thereby negate any undesired effects.
How Trusts Work
We define a trust as a legal mechanism that functions to designate the distribution of assets transferred by the settlor. The trust deed denotes the powers held by the trustees, while also determining the individual or class of beneficiaries and the manner in which trust benefits may be allocated to them. Trust management is the responsibility of the trustees, who may not however also be beneficiaries of the trust. Further, the liabilities for the trust remain under the personal liability of the trustees. Our lawyers will notify you in the event that registration for your trust needs to be completed with Companies House.