Trusts can be an effective way to reduce your tax liabilities and control what happens to your assets after you die. Many people are not sure how to set up a trust and it’s a subject we often get asked about. So to help, here are our top tips on setting up a trust. If you have any questions, the team at Powellslaw will be happy to advise you.
Can Anybody Draw up a Trust?
In order to be effective, the trust needs to be precisely worded. The Money Advice Service recommends asking a solicitor to draw up the trust to avoid mistakes that turn out to be costly.
Who Can Be a Trustee?
Trustees can be anyone you choose. Often, they are family members or close friends. Remember, you are handing them significant power and responsibility. Think very carefully before you decide and always check that your intended trustees are happy to take on the responsibility.
Does a Trustee Have to Be Somebody You Know Personally?
Sometimes people appoint a company such as a bank or firm of solicitors. There will be a cost associated with this option, but it can avoid mistakes later on and may be a good alternative if friends and family members don’t feel comfortable with the responsibility.
How Much Does It Cost?
The cost for setting up a trust varies depending on the complexity but the fallout arising from trusts that were not set up correctly can be considerable. More and more people are opting for the reassurance of using a solicitor and knowing that everything has been done correctly. If you are setting up a trust for a vulnerable or disabled person, some charities will offer financial support.