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Trusts … And how to control your property
from your grave.
What is a Trust?
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It is important to understand what a ‘trust’ is.
If you read the legal textbooks there are a number of definitions that try to define a ‘trust’. Some of these run into paragraphs of legal jargon. For the layman we believe the following describes the operation of trust.
‘A trust separates the ownership of an asset from the enjoyment
and benefit of the asset.’
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And the benefit of including a trust in a Will is that the trust allows the testator to control (via their trustees) what happens to their assets placed into the trust after their death. In effect, it allows the testator to continue to control their assets from their grave.
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All Will trusts fall into three categories:
- Discretionary: in a discretionary trust the trustees choose who benefits from the trust’s assets, if anyone at all. In other words they have complete discretion. The trustees should be given an ‘expression of wish’ by the testator setting out their wishes as to how the trust should be operated.
- Interest in Possession: in this type of trust the trustees have no choice over who benefits. The beneficiaries are stipulated by the testator, as are the terms upon which the trust assets are released from the trust.
- Statutory: Statutory trusts are created by statute rather than by the testator’s Will, and are created automatically on the death of the testator. A common example of this is where a child under the age of 18 is orphaned but because of their age they are unable to inherit their parents estate until they attain age 18 (or an alternative age stipulated in their parents Will).
Will writers and solicitors rarely use the simple category name. They prefer to use descriptive titles such as ‘Protective Property Trust’ which is a non-discretionary trust aimed at protecting the property from being used to fund long-term care costs. Another example is ‘Asset Protection Trust’ which is a discretionary trust.
What can a trust in a Will do?
Please see the column to the right for an explanation of how trusts can be used. And click on the links in the top right hand corner for detailed examples.
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Please note that unlike most of our competitors we do not charge an extra fee for including a trust in your Will. When comparing prices with our competitors please bear this in mind.
To discuss matters in more detail please contact us.
Do you want to know:
- the different types of testamentary trust;
- how a trust in your Will can increase your estate planning options significantly; and
- the risks of including a trust in your Will and the possible consequences to your family and loved ones if you die without making a valid Will..
You can appoint as many executors as you want in your Will … but only 4 (or less) can apply for Probate.
Read more about executors by clicking here.
