What is a Trust?
What is a Trust? – The Oxford Concise Dictionary gives these definitions:
“confidence placed in a person by making that person the nominal owner of property to be used for another’s benefit” and “the right of the latter to benefit by such property” and “the legal relation between the holder and the property so held”
Any clearer? No, probably not – so how about this as an over-simplified mental image:
Imagine a tin trunk placed on a shelf in a room of your choosing, with all the property you wish to shield or protect within it. Now add a big padlock with only one key and give that key to the two people you trust most in the world together with a letter of instruction and tell them never to open the trunk until they have consulted the letter you have just handed them, which is for their guidance only but they must act with total discretion.
In a nutshell, that is what a Trust does – separates certain property from a person’s (the settlor’s) Estate, places it in the care of others (the Trustees) so that it is now “under management” by them and specifically not in their ownership or the original person’s ownership. The Trust Property is held for a specified time or until a specified event (usually with other conditions specified) and always with beneficiaries of the Trust Property specified.
It must be clearly understood though that Trusts are many and varied, and exist for many purposes. For a comprehensive explanation of how Trusts might work for your specific circumstances, please contact us for more information.