Trusts
A Discretionary Trust is a valuable tool for inheritance and succession planning. Its benefits include flexibility and continuity – for example, when passing a family business to succeeding generations. It is a well-established process, protected under international law, whose main elements are:
- The Settlor, who transfers control of an asset to the Trustees.
- The Trustees, who owe a duty of care to the Beneficiaries.
- The Beneficiaries, who are entitled to benefit under the Trust.
Setting up a Trust requires the Settlor and Trustees to establish the 3 certainties:
- The intention to create a Trust
- The asset to be the subject to the Trust
- The beneficiaries, and how they are to benefit under the Trust.
The Trust Deed establishes what the Trustees may and may not do. As it is difficult to change the Deed after the legal formalities, we recommend that the Settlor gives the Trustees a professionally prepared Letter of Wishes. As this will not be part of the Trust Deed it can be changed at any time – for example, to take account of changes in family circumstances or if the Settlor has a change of mind. This Letter also guides the Trustees as to how they might exercise their discretion.
