Forming a Trust

The cost to administer a trust has increased considerably. Law changes and new fees and costs associated to administer a trust and keep it going are much greater than they were previously so you should have clear reasons for having a trust.

Trusts are often used to protect your assets from business risks, relationship break downs, or to help transfer assets to family members in the future.

Reasons for having a trust will be personal to each individual and one set of circumstances is not the same as another. It's important you understand why you are setting up the trust and can see that there is a clear benefit for doing so. We're happy to talk to you about your circumstances at any time.

Forming a Trust

Trust law uses some very specific terms so it is good to understand these terms at the outset. The common terms always used are:

• The Settlors: are responsible for gifting assets to the trust and will typically be the people who formed it.
• The Trustees: hold the assets of the trust as specified in the trust document. They can only act for the benefit of the beneficiaries.
• The Beneficiaries: are the people who benefit from the trust. 
• The Appointers: are the people who have the power to appoint the trustees and often include additional beneficiaries into the trust as well.

The Trusts Act 2019 has changed the way trustees duties are set out. It is now clear that trustees have certain default duties that they must follow:

• Know and understand the terms of the trust
• Act in accordance with those terms
• Act in honesty and good faith
• Act for the benefit of the beneficiaries
• All the trustees must agree unanimously on any decisions taken unless the trust document says otherwise.
• All decisions must be recorded

In addition to these required duties, some duties can be changed if they need to because of particular circumstances, and we can talk to you about these.