One of the more exotic areas of the law, trusts are a valuable and flexible estate planning tool which afford our clients effective ways to safeguard their assets, protect vulnerable adults and achieve significant tax savings.
As trust planning usually involves consideration of tax issues we recommend that clients only contemplate this after consultation with a competent accountant with experience in tax.
While we could fill a volume on the finer point of trusts, at their most simple a trust is a legal entity created by a legal document (a deed or will) which holds assets for people. The trust is established by an individual called a “Settlor” and controlled by individuals called “Trustees”. The Trustees manage the assets in the trust for the benefit of individuals, charities or other entities called “Beneficiaries”.
Trusts established by living individuals are called “Inter Vivos” Trusts while trusts established by a will on your death are called “Testamentary” Trusts.
There are many types of trust created for many different purposes. Rather than trying to address all of them in this summary please refer to articles that we will post from time to time. Some of the most commonly used trusts are:
- Alter Ego Trusts
- “Spendthrift” Trusts
- Joint Spousal Trust
- Discretionary (“Henson”) Trusts
- Family Trusts
- Insurance Trusts
As part of our estate planning we discuss the use of trusts with our clients if their circumstances warrant it. In those instances where a trust makes sense we have found them to an invaluable tool to ensuring that our clients estate planning goals are met.