Trusts and Professional Trustees

Trusts are the structure used for occupational pension schemes and ITC, of course, acts as trustee for these schemes. However, trusts are also used in a number of other contexts and ITC also acts as trustee for these other types of trusts. 

Trusts often are perceived as being highly complicated structures located in obscure jurisdictions   that bear no relevance to most people’s lives. This reputation is largely undeserved as in essence the concept of a trust is simple and the benefits a trust can provide considerable.

A trust will exist where someone (the settlor) gives property of any kind to one or more persons (the trustees) to hold for the benefit of others (the beneficiaries). There are, of course, different types of trusts and the rules governing them can be complex, but the essential concept remains the same.

First and foremost, trusts are asset-owning vehicles which can provide for both current and future generations. They may be created for many reasons, but the following are some of the more common examples:

• Family protection – safeguarding assets for the benefit of children or vulnerable persons.
• Asset preservation – preserving the family fortune.
• Asset protection – protecting assets against the claims of others.
• Business preservation – ensuring the continuation of a family business.
• Tax planning – mitigating the effects of taxation.
• Estate planning –providing flexibility around the timing and terms under which assets are distributed.
• Implementing of  court orders following dissolution of marriage or civil partnership. 
• Charitable organisations.

In many circumstances, a family member may be appointed trustee.  However, there is often merit in using a professional trustee rather than a family member, as such a person will be able to act impartially and independently. Furthermore, a professional trustee will be able to deal with the complicated tax and regulatory issues which often arise.

Apart from these types of arrangements, trust structures with a corporate trustee can also be used in commercial transactions. For example, the use of a corporate trustee is particularly helpful where confidentiality or commercial sensitivity is an issue or in structuring transactions involving syndicated lending or to collectivise investors for governance reasons. We act as trustees in a variety of commercial transactions.

The ITC trustee team includes solicitors, tax advisers and trust practitioners. Having this in-house expertise ensures that, as trustees, we fully understand the relevant legal and tax considerations to be addressed and can work efficiently with professional advisers to the trust.

If you would like further information on any of the points raised above, please contact Barry Kennelly by emailing barry.kennelly@independent-trustee.com or call 01 661 1022.

_{*Please note this content is the view of the author and not of Independent Trustee Company}