How to set up a Trust


A simple guide that covers the basics on how to set up a Trust and manage a Trust account.

Trust Definition

A Trust is a legal arrangement whereby one or more Trustees hold funds or assets for the benefit of one or more beneficiaries. There are many different circumstances when a Trust may be set up so there are various different types of Trust, which type of Trust arrangement is used will largely depend on the wishes of the settlor.

Settlor - This is the person who set up the Trust and makes a gift to the Trust. They decide who the Trustees and beneficiaries will be.

Beneficiaries - The people that the Settlor wants to receive the money that they have put into the Trust.

Trust Documents

The Trust Deed document will give a name to the Trust this often includes the name of the Settlor, and it will show the date that the Trust was established.

The Trustees responsible for managing the Trust’s assets will be named, this may include the name of a Solicitor Firm if some of the Trustees are acting in a professional capacity. The Trust Deed will also name any beneficiaries except in the case of a Discretionary Trust.

The Trust document will then set out the rules under which the Trust will operate and that the Trustees must adhere to. Any withdrawals from a Trust Savings Account must be in accordance with the terms of the Trust Deed.

The Trust Deed may be amended for example if Trustees are appointed or retire, if this is the case a Deed of Amendment or Retirement should be included with any application paperwork when applying for a Trust Savings Account.

In some cases the Settlors Will replaces the need for a Trust Deed.

Setting up a Trust

To set up a new Trust it is important to have thought about certain factors:

  • Who you would like to act as Trustees.
  • Who you would like to benefit from the Trust funds, for example, your children or grandchildren.
  • How and when you would like funds to be distributed to the beneficiaries.
  • Are there any restrictions you would like to place on the Trustees in terms of how they use or distribute assets and funds from the Trust.

Once you have decided on these factors it is important to talk to your Solicitor and Accountant, who will be able to draw up the Trust Deed document and advise you of any tax issues respectively.

Managing a Trust Account

Opening a Trust Account
To open a new Trust account we require:

  • A completed Trust Application form. We require all Trustees to have signed the form.
  • A copy of the Trust Deed or Will.
  • ID for all Trustees and named beneficiaries; please see our list of acceptable documents.
    For more help opening a Trust Account please contact our Customer Support Team on
    01225 475709.

To find out more about our Trust Account please visit the terms and conditions and read our complete guide.

 

The information given in this guide is based on Bath Building Society’s understanding of Trusts as of March 2015, which may change in future. It does not constitute a recommendation and individuals are advised to seek professional independent advice.