What is a Trust?

A trust is a way of managing assets (money, investments, land or buildings) for people. There are many different types of trusts available depending on what they need to achieve.

Trusts involve:

  • the ‘settlor’ - the person who puts assets into a trust
  • the ‘trustee’ - the person who manages the trust
  • the ‘beneficiary’ - the person who benefits from the trust

What trusts are for

Trusts are set up for a number of reasons, including:

  • to control and protect family assets
  • when someone’s too young to handle their affairs
  • when someone can’t handle their affairs because they’re incapacitated
  • to pass on assets while you’re still alive
  • to pass on assets when you die

What the settlor does

The settlor decides how the assets in a trust should be used - this is usually set out in a document called the ‘trust deed’. Sometimes the settlor can also benefit from the assets in a trust - this is called a ‘settlor-interested’ trust.

What trustees do

The trustees are the legal owners of the assets held in a trust. Their role is to:

  • deal with the assets according the settlor’s wishes, as set out in the trust deed or their will
  • manage the trust on a day-to-day basis and pay any tax due
  • decide how to invest or use the trust’s assets

If the trustees change, the trust can still continue, but there always has to be at least 1 trustee.


There might be more than 1 beneficiary, like a whole family or defined group of people. They may benefit from:

  • the income of a trust only - eg from renting out a house held in a trust
  • the capital only - eg getting shares held in a trust when they reach a certain age
  • both the income and capital of the trust


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