It is not always appropriate to give an asset or sum of money to an individual outright so instead assets can be looked after by trustees for beneficiaries in a trust.

Trusts can be set up in a lifetime or in a Will to take effect on death and some of the reasons people set up a trust are:

• to hold assets for beneficiaries who are under 18 until they reach a particular age
• to protect capital for a child who is financially irresponsible or getting divorced
• to provide for a disabled beneficiary
• to provide for a second spouse whilst protecting capital for children
• to save tax
  

There are also a number of different types of trusts and the most common include:

• discretionary trusts (including nil rate band ones incorporated in Wills to save inheritance tax)
• disabled trusts
• trusts for bereaved minors
• life interest trusts
• accumulation and maintenance trusts
  
  

If you would like advice on setting up a trust, whatever your circumstances, our team of specialists would be happy to discuss the options with you.

Trusts are subject to separate tax rules which changed in 2006. We can also advise you on the implications of these rules for new and existing trusts.