Types of trusts
There are a number of different types of trust that can be set up in the UK.
The main types of trusts that Fortress can set up for you are:
- Interest in possession trusts
- Discretionary trusts
- Settlor-interested trusts
- Offshore trusts
Interest in possession trusts
These are trusts where the trustee must pass on all trust arising income to the beneficiaries, as it arises (less any expenses) and or, the asset inside the trust is destined for the named beneficiaries.
These are trusts where the trustees can make certain decisions about how to use the trust income, and sometimes the capital.
Depending on the trust deed, trustees can decide:
- what gets paid out (income or capital)
- which beneficiary to make payments to
- how often payments are made
- any conditions to impose on the beneficiaries
Discretionary trusts are sometimes set up to put assets aside for:
- direct descendants and for bloodline planning
- a future need, like a grandchild who may need more financial help than other beneficiaries at some point in their life
- beneficiaries who aren’t capable or responsible enough to deal with money themselves
These trusts are where the settlor and/or their spouse or civil partner can still benefit from the trust.
They can be either Interest in Possession or Discretionary in nature.
- You can no longer work due to illness. You set up a discretionary trust to make sure you have money in the future.
- You are the settlor of the trust and as it is a settlor-interested trust, you may also benefit from the trust because the trustees can still make payments to you.
With our Head Office location in the Isle of Man we can also form and manage International and Isle of Man Trusts.
For more information about our International Trust Services, please click here.