Setting up a Trust
Setting up a trust enables tax-efficient management of your assets, and is a highly effective method of passing assets on to the next generation. Trusts are used to separate the ownership and management of assets from those who will ultimately benefit from them. The trustees own the trust assets and are responsible for managing them in the best interests of the beneficiaries, as laid down in the Trust Deed.
If you want to protect your assets for future generations, you can choose to set up a trust at any time or through your Will. While the beneficiaries are young, family trusts frequently allow assets to be transferred down the generations on the death of the benefactor. For example, a Will written by parents of young children will nearly always contain a simple trust for their benefit.
Benefits of Setting up a Trust
The advantage of using trusts is that they can be very flexible:
- A trust can either be wholly discretionary as to who benefits from the capital and/or income, or may have fixed entitlements to income or the right to inherit capital at a fixed age or date.
- Trusts can be useful to help protect assets against potential risks such as business insolvency, personal overspending or matrimonial claims.
- Trusts are also frequently used in a commercial context, such as pension funds or trusts to benefit employees through company shares or other methods of reward.
Our accredited specialists can guide you through the complexities of Scottish Trust Law, from the use of trusts in inheritance tax planning to the general administration and management of a trust.