TYPES OF TRUSTS

Trusts may be created for a variety of reasons such as tax effective estate planning or to provide ongoing support for a beneficiary, or benefit a charity. There are several different types of trusts with each having a particular purpose:

Children’s Trusts

These are generally created in Wills and are managed for children until they reach the age of 18 or older as determined by the provisions of the Will. These trusts can be created to take effect if one or both parents die, and can help to prove tax effective income to the children. 

Trusts for beneficiaries with a disability

These trusts are managed for the lifetime of someone who cannot manage their own affairs. Benefit is the key word and the Trustee has to be sympathetic to all needs, yet maintain investment security.

Life Estates

These trusts are set up to provide accommodation and/or an income stream for the lifetime of a close friend or relative. They are often used by people who have remarried and want to provide ultimate ownership of assets to their children rather than their spouse.

Discretionary Testamentary Trusts

These are created by a Will, and give the Trustee the discretion to split the income between a family group for a period of time. Ultimately the assets are given outright to these people. Although changes in taxation laws may have an impact on these Trusts, they are currently tax effective because the Trustee can vary the income paid depending on how much other income the beneficiary receives.

Charitable Trusts

You may wish to provide long term income benefit to a charity (such as for a scholarship or medical research), rather than giving an immediate gift. As these trusts can be very long term, it is in your and the charity’s interests to use the Public Trustee.

All these trusts need careful explanation and proper assessment of their benefits to you or your beneficiaries. It is often a matter of matching your wishes and your beneficiaries’ needs with the right type of trust. The Public Trustee is able to discuss your requirements and recommend the trust which is best suited to your needs.