Rainey Collins Lawyers

Don’t risk your trust not working

By Claire Coe, Monday, 17 January, 2011, Trusts

Trusts are for protecting property.  They do this very well but only if they are properly administered.  If you get into financial difficulties and have significant assets in your Trust, the first thing your creditors will do is to try to get their hands on those assets.

This means it is absolutely vital that your Trust cannot be accessed by anyone other than those for whom it was established.

One of the main things that can make a Trust vulnerable is failure to run it properly as an entity that is completely separate from your personal assets.  You should:

1. Hold an Annual Meeting of Trustees and keep proper Minutes of Trustees’ decisions.
2. File an annual Tax Return.
3. Prepare annual accounts.
4. Keep proper records of all financial movements.
5. At all times keep the Trust’s property separate from your remaining personal assets.  That means never include any Trust property in a statement of your personal assets given to your Bank.
6. If you and your spouse are the only Trustees, it is advisable to have a separate, independent Trustee as well.  While this is not a legal requirement, it shows that the Trust property is no longer under your sole control.
7. Ensure that all the Trust’s assets are in the names of the Trustees.

All the above points are straightforward but failure to observe them could easily result in your Trust being vulnerable.  If it turns out that your Trust does not give you the protection you expected, then why have it in the first place?

Call us Toll Free on 0800 733 424