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Eight steps to setting up a trust that leaves a legacy

Setting up a trust can be an excellent way to manage your assets, protect your wealth, and ensure that your loved ones are taken care of when you’re gone.

Trusts offer flexibility, control, and confidentiality, but they can be complex legal structures and are best discussed with qualified legal experts to ensure you get the process right.

Here’s a step-by-step guide to help you navigate the process of setting up a trust that will be a crucial part of your legacy.

Step 1: Identify the purpose of the trust

Trusts can serve various purposes, such as asset protection, tax planning, or providing for a family member with special needs.

The purpose of the trust will dictate the type of trust that’s most suitable for your situation.

A solicitor can help you determine which type of trust best suits your purpose.

Step 2: Choose the type of trust

There are several types of trusts, each with its own set of rules and tax implications. The most common types include:

  • Revocable trust: Allows you to retain control of the assets and make changes to the trust during your lifetime.
  • Irrevocable trust: Once set up, this trust cannot be altered without the consent of the beneficiaries.
  • Discretionary trust: The trustees have full discretion over how to distribute the assets.

Step 3: Select the trustees

Trustees are responsible for managing the trust according to its terms and must act in the best interests of the beneficiaries.

It’s crucial to choose individuals or institutions that are trustworthy, competent, and willing to take on this responsibility.

Step 4: Identify the beneficiaries

Beneficiaries are the individuals or organisations who will benefit from the trust.

Be as specific as possible when naming beneficiaries to avoid any ambiguity.

It’s also advisable to consider alternative or contingent beneficiaries in case the primary beneficiaries are unable to accept the assets.

Step 5: Draft the trust deed

The trust deed is the legal document that outlines the terms of the trust, including the powers and duties of the trustees, the conditions under which assets will be distributed, and any other specific instructions.

It’s highly recommended to consult a legal expert to draft this document to ensure it meets all the legal requirements.

Failure to correctly draft this document might mean that the trust is misused or fails to fully satisfy your intentions.

Step 6: Fund the trust

Once the trust deed is finalised, the next step is to transfer assets into the trust.

This could include money, property, or investments but all assets must be legally transferred to the trust for it to be valid.

Again, it is best to consult a solicitor during this process to ensure that all assets are accounted for.

Step 7: Register the trust

Depending on the jurisdiction and the type of assets involved, you may need to register the trust with relevant authorities.

This often involves submitting the trust deed and any other required documents.

Step 8: Ongoing Management

Once the trust is set up, it’s essential to manage it effectively.

This includes regular reviews, accounting, and reporting to ensure it continues to meet its objectives and complies with legal requirements.

Setting up a trust can be a complex process, but with careful planning and expert guidance, it can offer numerous benefits for asset management and estate planning.

Ensuring your Will is correct and creating a trust to care for your family once you are gone is a vital consideration in estate planning.

A solicitor can help ensure that your loved ones are cared for once you’re gone, get in touch with one of our estate planning team to learn more.


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