Chris Thorpe considers some of the features and potential benefits of trusts.
Trusts are essentially a separation of an asset’s ownership between the legal owner (the trustee) and the beneficial owner, i.e., the person or people who can enjoy that asset (the beneficiary).
For the person who creates the trust (the settlor), there can be numerous benefits – for tax and non-tax reasons.
Types of trusts
There are two broad types of trusts – ‘express’ and ‘implied’. Within the definition of express trusts are ‘discretionary’ and ‘interest in possession’ (IIP – alternatively known as ‘fixed interest’) trusts. These are trusts which have been deliberately created, i.e., everyone knows their position within the trust and corresponding duties and rights; trustees are responsible for
