A trust is the formal transfer of assets (it might be property, shares or just cash) to a small group of people (usually two or three) or to a trust company with instructions that they hold the assets for the benefit of others. If the trust is to be made in your lifetime, to take immediate effect, then it is usually evidenced by a trust deed and often referred to as a ”Settlement ”. If it is to be created on or shortly after your death then the trust rules must be set out in your Will -a ”Will Trust”.
Whether by lifetime Settlement or by Will, the trust document states who are responsible for looking after the gifted assets (the trustees), who are to benefit (the beneficiaries) and any rules or conditions to which the trustees and beneficiaries must adhere. The separation of the legal ownership and beneficial ownership, which were once inseparable, is the unique characteristic of the trust concept; trustees are the legal owners but the beneficial owners are the beneficiaries.
How long a trust shall last is entirely as you think appropriate but you must stipulate the trust period in the trust document. It might be for just a few years, perhaps during a person’s widowhood or until a child attains a certain age or marries. However, trusts can last for much longer-up to 80 years-or forever if it is a charity. It is usually advisable to give the trustees the power to terminate the trust at their discretion.
If you are creating the settlement in your lifetime then you can appoint yourself and your spouse as trustees if you wish so that you remain in control of the assets and the decision-making.
Throughout their history, trusts have been used to avoid or address problems in two main areas: taxation and family matters.