There are many different kinds of trusts. Among the most common are:
Absolute/Bare Trust - this is also known as a simple trust. It is where the beneficiaries have the right to the capital and assets in the trust and any income generated from them. The trustee has the responsibility to manage the assets prudently but does not have a say in how or when the trust's capital or income is distributed.
Discretionary Trust - with a discretionary trust, the beneficiaries don’t have a fixed entitlement to the trust funds. It is up to the trustee to decide which beneficiaries receive capital and income from the trust and how much.
Disabled or Disability Trust - designed to help vulnerable and disabled beneficiaries.
Trust of Land - Where someone is on title of a non-main residence but another family member lives in the house, it is possible to evidence in writing the facts of the ‘verbal trust’ that is already in place informally. This can mitigate Capital Gains Tax on the non-resident owner, if sold pre the owner’s death, as main residence relief can be claimed if a trust beneficiary lives there.
Property Protection Trust - is simply a trust where the asset is a property or a share of a property. Typically, it is used to allow a current occupant to continue living on the premises while protecting the capital value to benefit others. It is worth noting that 'Property Protection Trust' is a marketing term for a ‘life interest’ trust within a will.
Interest in Possession Trust - where a beneficiary has the right to income from the trust as it arises.
Declaration of Trust - is a legally-binding document recording the financial arrangements between joint property owners, and/or anyone else with a financial interest in the property..
Spousal Bypass Trust - an individual can place their pension lump sum death benefits into a discretionary trust, allowing the spouse to benefit without these benefits forming part of the survivor’s estate on death.
Pilot Trust - can often be used for people who wish to undertake Inheritance Tax (IHT) planning. They are lifetime trusts set up with a nominal amount and which are ready to receive further funds and/or property at a later date or upon the death of the donor by way of a legacy in their Will.
Loan Trust - a settlor makes an interest-free loan to the trust, which is repayable on demand. Any part of the loan repaid to you will form part of your estate upon your death. The trustees can invest the loan, but any growth on it will not be subject to inheritance tax.
Gift & Loan Trust - a financial gift or loan is made to the trust. Any growth will not form part of any inheritance tax settlement.
Discount Gift Trust - where a settlor can gain a lifetime income from a lump sum they gift to the trust.
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