What Is A Trust?

10th March 2009

So What Is A Trust?  

Trusts are an important aspect of the English legal system. They are a multi functional legal tool predominantly used to ensure that property is dealt with in an acceptable way after the death of the owner, or in a situation where an individual no longer holds the capacity to do so themselves.

Trusts in their various guises are also a very effective tool that can be used by many individuals and families to help save tax and accurately protect the different interests in property and assets.

How do they work?

A trust is a legally binding document that allows the management of property to be handed over from the owner to an individual party, this means the legal ownership of the property is 'placed in trust', and it is transferred to the trust itself, which is subsequently maintained by the trustees. The trustees are normally appointed by the individual who has established the trust, who is known as the settlor.

The trustees take on what is known as a 'fiduciary duty' to the beneficiaries, who are also appointed by the settlor. Essentially, the fiduciary duty obliges the trustees to maintain the property in trust in such a way that the beneficiaries receive the maximum potential gain.

The trustees do not benefit from the property unless this has been specifically allowed by the settlor, and they must agree that their personal concerns will be subservient to those of the beneficiary.

The terms of a trust are usually defined in a written document; in many cases this is an individual's testament. It is legally possible, however, for a trust to be established without written instruction. It must be shown that there was an intention on the part of the settlor to create a trust, but this does not necessarily rely on documentary evidence. Rather, intention can be established verbally - this is particularly useful in cases where an individual has died but has not left a will.

Why Choose a Trust?

Trusts are not just used to safeguard assets after death. There are a huge number of different trusts available each with different functionalities, Whilst estate and inheritance planning are the more common reasons for establishing a trust, the type of trust an individual decides to make will depends entirely on different circumstances in that individuals life.

We are expert Trust Solicitors in Bournemouth with solutions to all your Trust problems. Simply contact us today on 01202 802 807.