Page 10 - Town & Around - May 2025

10 Town & Around May 2025 Tel: 01485 540620 email: editor@townandaround.net
Setting up a trust – what to consider Setting up a trust in your Key considerations and
legal requirements
will or during your
By Jennifer Taylor, Associate Solicitor, Hayes + Storr lifetime When setting up a trust, your
Trusts provide flexibility in solicitor will need details about:
managing and distributing assets A trust can be created either • The type and value of assets to
and offer benefits such as: during your lifetime (lifetime be placed in the trust
• Protecting assets for future trust) or through your will (will • Intended beneficiaries and their
generations trust). Each option has specific needs
• Reducing exposure to advantages and tax implications: • Tax planning goals
Inheritance Tax (IHT) • Lifetime trusts - Useful for • Family dynamics or potential
• Safeguarding assets for estate planning, as transferring disputes
vulnerable or young beneficiaries assets more than seven years • Who the trustees should be and
• Facilitating charitable giving before death may remove them their role
• Ensuring assets are used in from IHT calculations. However, • Provisions for vulnerable
accordance with your wishes these trusts may be subject to beneficiaries
periodic and exit charges under • How the trust should be
Types of trusts the ‘relevant property regime.’ managed and overseen
Different trusts serve different Understanding these taxes is vital Many trusts must be registered
purposes. Common types include: before proceeding. with the Trust Registration
• Bare trusts - Assets are held for • Will trusts - These come into Service (TRS) to comply with
beneficiaries who are entitled to effect after death and can be legal obligations. Failure to
etting up a trust can be an them outright. structured to take advantage of register may result in penalties, so
effective way to protect • Discretionary trusts - Trustees tax reliefs such as the nil-rate it’s important to determine
Syour assets and ensure they decide how and when to band and residence nil-rate band. whether this applies to your trust.
are distributed according to your distribute assets, offering They can also protect assets, For more information or to
wishes. Whether planning for flexibility. ensuring fair distribution in discuss setting up a trust, contact
your family’s future, reducing tax • Life-interest trusts - A blended families by providing for Jennifer Taylor in our private
liabilities, or safeguarding assets beneficiary receives income a surviving spouse while client team on 01328 863231 or
for vulnerable beneficiaries, during their lifetime, with the preserving inheritance for email: jennifer.taylor@hayes-
tailored legal advice is essential. capital passing to others later. children.
• Charitable trusts - Created to Careful consideration should storr.com.
What is a trust and why support charitable causes, often be given to the structure of a trust, This article is for general
set one up? with tax advantages. ensuring it aligns with your long- information only and does not
A trust is a legal arrangement Each type has legal and tax term plans, tax position, and constitute legal or professional
where assets are held by trustees implications, so seeking expert financial circumstances. advice. The law may have
for the benefit of beneficiaries. advice is crucial. changed since publication.