Product icon

Trusts explained

A trust can be an extremely effective financial planning tool and essentially is a legal arrangement that lets the owner of something ‘gift’ ownership to someone else, this could include cash, property, shares or a life insurance policy.

These arrangements allow the person making the gift (the settlor) to transfer ownership of their assets to another party (the trustees). The trustees hold the assets for either the sole benefit of a chosen person or group of people (the beneficiary) - without giving them access to the assets for the time being.

 

Who is involved in setting up a trust

There are normally three parties involved in setting up a trust:

  • The settlor – this is the person who creates the trust. They will appoint trustees to administer the trust and decide who the beneficiaries of the assets will be.
  • The trustees – these are the people the settlor chooses to hold and manage the assets, according to the terms of the trust, for the sole benefit of the beneficiaries.
  • The beneficiary – this is who the settlor wants to benefit from the assets held under trust.

Everything that is done with the trust assets by the trustees must be in the best interests of the beneficiary.

 

How a Trust works

  • The settlor - transfers ownership of his or her asset(s) to another party creating the trust
  • The trustees - become legal owners of the asset(s) and administer it for the benefit of the settlor’s chosen beneficiaries
  • The settlor - will be a trustee and should appoint additional trustees
  • The beneficiary - may benefit from the asset(s) under the trust at a future date.

For further information on trusts, including some key questions and answers, please see our Trust Overview Guide.

 

Which trust to use

Copyright ©2018 Scottish Widows | Copyright, companies, legal and privacy information |  Accessibility | Site map

Important Information about Scottish Widows | Read about how we use cookies

Information within this site is intended for UK authorised and regulated financial advisers only. It is not intended for onward transmission to retail customers and should not be relied upon by any other person. If you are not an adviser please return to our consumer site.

Scottish Widows is not responsible for the content of third party websites. Separate terms apply to the use of third party websites and Scottish Widows does not warrant the accuracy, reliability, availability or otherwise of these sites.

By using this site you agree to our terms & conditions of use. Please read our copyright, companies, legal and privacy information. We may record and monitor calls to help us improve our service.

Scottish Widows Limited. Registered in England and Wales No. 3196171. Registered office in the United Kingdom at 25 Gresham Street, London EC2V 7HN. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Financial Services Register number 181655.

Scottish Widows Unit Trust Managers Limited. Registered in England and Wales No. 1629925. Registered Office in the United Kingdom at Charlton Place, Andover, Hampshire SP10 1RE. Tel: 0345 300 2244. Authorised and regulated by the Financial Conduct Authority. Financial Services Register number 122129.

HBOS Investment Fund Managers Limited, registered in England number 941082. Registered office in the United Kingdom at Trinity Road, Halifax, West Yorkshire HX1 2RG. Authorised and regulated by the Financial Conduct Authority. Financial Services Register number 119223.

Scottish Widows Bank is a trading name of Lloyds Bank plc. Registered office: 25 Gresham Street, London EC2V 7HN. Registered in England and Wales, no. 2065. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under number 119278.

Browser Warning: your browser may not be fully supported on this site. Visit our browser help page for a list of supported browsers.
close