Who’s involved in setting up the trust?Wed Dec 03 09:09:11 GMT 2014
- The settlor is the person who sets up the trust by transferring property (for example a life protection policy) into that trust. There can be more than one settlor of a trust.
- The trustees are the legal owners of the trust fund (for example a life protection policy). They must hold or use it for the beneficiaries and can’t use it for their own personal benefit.
- A trustee can be anyone over 18 who is of sound mind. It wouldn’t be usual for a bankrupt to be a trustee. The settlor and/or a beneficiary may be a trustee. However, if a beneficiary is also a trustee, a conflict of interest could arise, especially when trustees have the power to decide by how much a beneficiary can benefit.
- The beneficiaries receive the benefits from the trust fund in accordance with the trust deed and the decisions of the trustees.
- With a bare trust, the beneficiaries are set in stone, when the trust is created and can’t be changed at a later stage. In contrast, with a flexible trust, the trustees can appoint the trust fund to anyone within the class of possible beneficiaries.