What is a Trust? A Simple Guide to Protecting Your Assets & Loved Ones
- Anna Kmiec
- Mar 22
- 2 min read
When people hear the word "trust," they often think of something complex or only for the wealthy. But in reality, trusts are a powerful way to protect assets—whether it’s your home, savings, or investments—and ensure they are used the way you intend.
A trust can provide security for your family, your future, and even for those who may need extra support in managing money. So, how do trusts work, and why might you consider one? Let’s break it down.
🔹 What is a Trust?
A trust is a legal arrangement where you (the settlor) place assets—such as money, property, or investments—under the control of trustees. These trustees manage the assets for the benefit of one or more beneficiaries (such as your children, partner, or other loved ones).
Think of a trust like a safety deposit box: you decide what goes inside, who has the key, and when they can access it.
🔹 Why Set Up a Trust?
People create trusts for many reasons, including:
✅ Protecting family assets from unexpected events like remarriage, divorce, or financial difficulties.
✅ Providing for children or loved ones who are too young or unable to manage finances on their own.
✅ Ensuring assets are passed on exactly how you want—either during your lifetime or after you pass away.
✅ Helping manage inheritance tax and financial planning.
🔹 What Can Be Placed in a Trust?
A trust can hold a variety of assets, including:
🏡 Property or land
💰 Savings & investments
🖼️ Valuable items like antiques or artwork
📈 Shares or business interests
These assets, also known as trust property, are managed by the trustees according to the rules set out in the trust deed.
🔹 Who’s Involved in a Trust?
🔹 Settlor – The person who sets up the trust and places assets into it.
🔹 Trustees – The people responsible for managing the trust (this could be a trusted friend, family member, or even a professional such as a lawyer).
🔹 Beneficiaries – The people who will benefit from the trust (e.g., your children, spouse, or other chosen individuals).
Each person plays a key role in ensuring the trust works as intended.
🔹 Common Types of Trusts
💡 Will Trusts – Activated when you pass away, ensuring assets are distributed as per your wishes.
💡 Lifetime Trusts – Created while you’re still alive, allowing you to manage and distribute assets over time.
💡 Discretionary Trusts – Giving trustees flexibility to decide how and when to distribute assets to beneficiaries.
🔹 What’s Next?
If you’re unsure whether a trust is right for you, speaking with an expert can help. Trusts can be tailored to your specific needs—whether it’s protecting your home, ensuring financial security for loved ones, or planning for the future.
📞 Got questions?
Contact Citywide Wills on 01926 897077 or email anna@citywidewills.co.uk for friendly, expert advice!
A trust isn’t just a legal document—it’s peace of mind, knowing that your assets and loved ones are protected. 💙
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