WHAT IS A TRUST?
A Trust is a separate legal entity which has a life of its own.
A Trust has three participants:
The Settlor - the persons who initially transfer property to a Trust in order to create the Trust.
The Trustees - the Trustees hold the property of the Trust and are responsible for dealing with that property in accordance with the Trust Deed. It does not matter legally, who the Trustees are, so long as they have the legal capacity to act as Trustees. It is most common however for the Trustees to be the people wishing to set up the Trust quite often together with an independent third party such as a solicitor, accountant or close family member.
The Beneficiaries - these are the people who, at the discretion of the Trustees, are entitled to receive a benefit under the Trust. The beneficiaries will normally comprise the husband and wife, children and their descendants. Depending on circumstances, other family members or relatives may also be included.
The Trust Deed identifies the Settlor, Trustees and Beneficiaries; sets out the powers of the Trustees and generally lays down the ground rules for the Trust. A Trust may well exist for a long period of time and thus it is vital that the Trust Deed is flexible enough to cover changing circumstances over time.