Trusts

A Trust is a method for managing assets. Assets could involve cash, investments, land or buildings.

When Trusts are set up, they are managed by a Trustee for the benefit of another person, or multiple people (the beneficiaries). Trusts will often be set up to support beneficiaries who would not be able to manage the assets immediately.

There are various different types of Trusts which can be set up. These include:

Lifetime Trusts

Lifetime Trusts can be set up and put into action immediately. The settlor will continue to benefit from the assets in the Trust while they are still alive.

Vulnerable and Disabled Persons Trusts

These types of Trusts provide special Tax treatment for vulnerable beneficiaries. In this context, a vulnerable person would be someone under the age of 18 whose parent has died, or disabled person who is already eligible to receive certain benefits. With a Vulnerable and Disabled Persons Trust, the assets will typically not affect a beneficiary’s means-tested benefits.

Discretionary Trusts

With a Discretionary Trust, the Trustees will be able to make decisions related to the Trust income and, depending on the terms, the capital. They could be given the authority to decide on what gets paid out, when to pay beneficiaries, and whether certain conditions should be applied.

Insurance Trusts

A life insurance policy will usually be the primary asset in an Insurance Trust.

Charitable Trusts

As the name would suggest, Charitable Trusts are strictly for charitable purposes. Trustees will only be able to use the income or capital to support charities or charitable causes.

Property Trusts

These types of Trusts will cover a share of jointly owned property to ensure that a surviving spouse is able to continue benefiting from the deceased partner’s share in the home, without actually owning the home outright.

Trusts for Grandchildren

Trusts for grandchildren is a common option for many people. There are various provisions in place to prevent parents from shifting income from themselves to their children. These are not necessarily in place for grandparents who intend to provide for their grandchildren under the age of 18.

There are typically three parties involved in handling a Trust. A settlor, the Trustees and the beneficiaries.

The settlor is the person who creates the Trust and details how the assets in the Trust should be used.

The Trustees manage and administer the Trust and the assets contained within. They will deal with the Trust according to the settlor’s wishes.

The beneficiaries are the individuals who benefit from the Trust.

Yes, potentially. When money is placed into a Trust, you may no longer be considered to be the owner, which means it may not count towards your Inheritance Tax bill when you pass away.

There is no legal requirement to have a solicitor help you create a Trust. However, Trusts can be very complex legal documents, so it is important to have a detailed understanding of what needs to be included so that it will be considered valid in the future and won’t be the cause of a dispute.

For the best chance of creating an accurate Trust, it is important to have the advice and guidance of an experienced solicitor specialising in Trusts on your side.

Registering a Trust with HMRC is a new requirement, to make sure you and the Trust comply with anti-money laundering regulations. HMRC will not currently charge a penalty if they find out that you have failed to register or to maintain the Trust, as long as there was no deliberate behaviour and you take steps to correct the error within a set time limit. At Kingsfords we will assist with the Registration process to best protect your position.

The fees involved in a legal matter relating to a Trust will most often depend on the complexity of the Trust, whether there is other ongoing administration, and what level of advice is required.

For more information on our pricing breakdown, please consult our pricing page. We always strive to offer an affordable option and are happy to discuss an estimate with you.

The process for appointing a new Trustee will depend on the specific terms set out in the Trust deed as well as the nature of the Trust. Our Trust solicitors in Kent can help you through each stage, including:

• Reviewing the Trust deed — Determining how Trustees can be replaced or appointed as outlined in the deed terms
• Drafting a Deed of Appointment — Drafting an effective Deed of Appointment to confirm the role of the new Trustee
• Ensuring agreement across existing Trustees — Communicating with existing Trustees to ensure agreement and prevent disputes
• Notifying the relevant parties — Updating Trustee details with HMRC, as well as any relevant banks or asset holding institutions
• Providing expert legal advice — Helping to ensure that the appointment is valid and fully compliant with Trust law.

Trustees are held to a high standard of care and have several duties under UK law. Failure to meet these duties can lead to a Trustee being held personally liable. Our Trust solicitors in Kent can advise you on your duties as a Trustee and how to meet them, which includes:  

• Complying with the Trust deed
• Acting in the best interest of the Beneficiaries
• Keeping accurate accounts and records
• Managing Trust assets in the most appropriate way
• Avoiding conflicts of interest
• Filing relevant tax returns
• Registering and maintaining trusts with HMRC’s Trust Regulation Service (TRS) where appropriate

If a Trustee dies or becomes unable to fulfil their duties, then the first step is to check what the Trust Deed says when it comes to how and when replacements should be appointed. Our Wills and Trusts solicitors can review any documentation to help you understand the steps ahead of you.

We may then assist you in drafting a Deed of Retirement and Appointment in order to remove a former Trustee and name a successor. If no replacement is named, then any remaining Trustees may be able to continue administering the Trust.

In select cases, the court may itself appoint a new Trustee, particularly in circumstances where there are no willing or remaining Trustees. Our Trust solicitors can help you to act proactively to ensure the Trust is managed by appropriate Trustees.

Yes, our Trust solicitors in Kent regularly find ways to resolve disputes that involve Trusts, such as disagreements between Beneficiaries, accusations of Trustee misconduct, conflicts, or issues relating to the interpretation of the Trust Deed.

We prioritise finding an out of Court solution wherever possible, negotiating with the involved parties to find cost friendly and effective solutions. Early legal intervention is key, and where litigation is unavoidable, we will ensure that your best interests are represented accurately and defended in Court.