Trusts

In Britain, the concept of establishing legal trusts began in the middle ages.

In those days, should a tenant farmer die without a son over the age of 21, the Landlord was entitled to the use of the land until any male reached majority.

However, by setting up a trust prior to his death, the farmer could enable a trusted friend to control the land until such time as any heirs became of age.

Interestingly, one of the earliest and most extensive uses of trusts in England was by the Franciscan Friars in the thirteenth century. In wishing to honour their vows of poverty they made a distinction between the legal title and the beneficial use of property. It was quite common for a pious and wealthy individual to 'give the use' of a property to the Franciscans for free, or for a nominal rent, whilst retaining ownership of it himself.

Many of the historical reasons for using a trust are still appropriate today:

• Confidentiality - the trustees deal with trust affairs; neither the settler (the person who creates the trust) nor the beneficiaries need to know.
• Avoidance of probate and determination of succession.
• Flexible inheritance planning.
• Generation skipping - allowing a younger generation to benefit from wealth, but not to control it.
• Planning to minimise taxes on income and/or capital gains.
• Protection from creditors.

Careful consideration should be given before setting up a trust, and professional help should be sought.

Please note that all references in this site relate to United Kingdom Wills and all Wills are produced on this basis. Those people of a non-UK nationality are advised to seek advice from a suitably trained professional specialising in the laws of their own country. All information supplied on this site should be used as general information only and individuals should seek advice before completing their Will. Details on this site should not be copied or reproduced in any format without specific written authority.Special thanks goes to the Society Of Will Writers on which some of the content of this site is based.