Types Of Trust

Broadly speaking, all trusts follow similar principles. However there are certain distinctions between the three key types of trust: Discretionary Trusts, Fixed Interest Trusts and Accumulation and Maintenance Trusts.

The Ardel trust team administers all types of trusts in a number of jurisdictions and works closely with professional advisers to determine the most appropriate trust(s) for each client’s specific circumstances. On occasion the type of trust selected will have a bearing on the tax position of the settler.

The most common form of trust is a Discretionary Trust which is a highly flexible vehicle and widely used across a broad spectrum of situations. A Discretionary Trust allows the greatest degree of discretion to the trustees in administering the trust. This enables the trustee to be able to react to the ever changing circumstances of every day living but at the same time always acting in the interest of the beneficiaries.

Fixed Interest Trusts usually provide for one or more individuals to receive trust income during their lifetime with other beneficiaries then being entitled to the capital trust assets upon their death.

Accumulation and Maintenance Trusts are usually formed for the benefit of children or grandchildren, particularly for ensuring their maintenance during their infancy and for making provision for their education. At the end of the Accumulation Period (usually when the children reach 25 years) the trust often reverts to a Discretionary Trust, where again the trustees will be guided by the settlor’s wishes as to the long term requirements of the capital. Following changes to inheritance tax legislation Accumulation and Maintenance Trusts are not as favourable in the UK as they were in the past with many clients preferring to use a Discretionary Trust instead.

Trust Assets

Assets, both tangible or intangible, can be settled into a trust. This can be anything from company shares, commercial property and cash, to antiques, classic cars and intellectual property. Whatever asset type, the trustees’ duty is always to manage and administer appropriately for the benefit of the beneficiaries. We are wholly flexible in terms of the types of assets we are prepared to administer on behalf of clients. This flexibility is not something all of our competitors can offer.