Trusts are an important financial tool when it comes to asset planning. A trust is created when a person, the settlor, transfers property to trustees. This is typically is for the benefit of a third group of people, who are the beneficiaries. The trustees are obliged by law to use the property for purposes specified by the settlor. These purposes are specified in the trust deed. Commonly, one of these purposes is to make payments from the trust property to the beneficiaries.
Although a trust is normally given a name and is often referred to as if it is a separate entity (like a limited liability company), it is not. Trusts are simply a relationship between trustees and beneficiaries. Duties are imposed on the trustees to deal with the trust property in the interests of beneficiaries.
Benefits of a Trust
The main benefits of trusts are creditor protection, protection from relationship property claims and to ensure certain assets are passed down through the generations. A trust can also be used to obtain rest home subsidies (in certain circumstances), for estate administration and as a mechanism for managing the assets of somebody who is unable to manage them. Trusts may also provide some tax advantages.
To find out more contact the Nairn Fisher team, today.