FORTHCOMING CHANGE: The fifth anti-money laundering directive (5MLD) was published in the EU official journal on 19 June 2018 and came into force on 9 July 2018. The...
Gathering information from the client When taking instructions it is preferable to ensure that the client completes an asset and liability statement. Consideration can...
An asset protection trust is one that is established to safeguard assets from potential threats. The threats may be from third parties such as potential creditors or...
Who may be beneficiaries Every person who would be capable of owning property if of full age and sound mind may be a beneficiary under a trust, even if they are not of...
What is a blind trust? A blind trust is a trust that is aimed at preventing conflicts of interest arising. Usually, the settlor and beneficiary of the trust is a...
Express lifetime declarations Where a trust is created by an express lifetime declaration, the settlor simply declares that they hold the trust property on trust for the...
Creation of new trusts in the exercise of powers under existing trusts For capital gains tax purposes, if property passes into a new settlement, there is a deemed...
Persons lacking mental capacity Settlements, gifts and variation of trusts Section 18 of the Mental Capacity Act 2005 (MCA 2005), Court of Protection Rules 2017 (SI...
Creation by transfer of property to trustees In practice trusts will frequently be created by a settlor transferring assets to independent trustees on the basis that the...
Trust drafting Testators frequently wish to include a trust or trusts in their Wills. Even if this is not the case, a trust may arise: • where a beneficiary is under 18...
Table of contents Settlement deeds are often long and complex documents. Consequently, modern precedents generally start by setting out in a table of contents the...
The nature of a discretionary trust The following extract from Underhill and Hayton: Law of Trusts and Trustees aptly describes a discretionary trust: 'A discretionary...
Constituents of a trust When drafting, keep in mind that the essentials of creating a validly constituted trust are: • there must be property or rights capable of being...
Defining life insurance trusts A life insurance trust usually involves either: • an assignment of an insurance policy together with a declaration of trust or • the...
The nature of a life interest trust In its basic form the life tenant is entitled to income produced by the trust fund or to the use of trust assets. The life tenant is...
The nature of a marriage settlement A marriage settlement is a settlement made in consideration of marriage either: • before the marriage or • after the marriage if made...
Common misconceptions There are a number of common misconceptions concerning the standard opening words used in settlement deeds, for instance: • it is not necessary for...
Sufficient funds To determine whether or not the settlor will be left with sufficient means to provide for themselves after creating a settlement, the solicitor advising...
Protective trusts are a long-established method of making provision for beneficiaries who are in need of protection. Typically, they have been used where a beneficiary is...
The Solicitors Regulation Authority The new Solicitors Regulation Authority's Handbook which contains the new Solicitors Regulation Authority's Code of Conduct 2011 (the...
Preliminary considerations Before commencing work the solicitor drafting the settlement deed must be clear in their mind what they are seeking to achieve. The client's...
Appointment of original trustees The trustees must be clearly identified in the settlement deed. For example: 'THIS SETTLEMENT is made the ....... day of ............
What is a flee clause? A flee clause is a clause in a trust instrument which purports to automatically transfer the trusteeship and the forum for the administration of a...
FORTHCOMING DEVELOPMENT: The Office of Tax Simplification (OTS) has released a report outlining recommendations to make considerable aspects of the design of inheritance...
The rules relating to perpetuities and accumulations stem from the provisions in the Perpetuities and Accumulations Act 1964 (PAA 1964) and from common law. These...
Types of personal injury trust How to choose between the different types of trust Personal injury trusts are often considered in the context of the injured person having...
FORTHCOMING CHANGE: As originally announced at Autumn Budget 2017 and followed up by written statement after Spring Statement 2018, plus an announcement in Budget 2018,...
What is a protector? A protector is a person who holds powers under a trust but who is not a trustee. A protector is a person who is independent of the trustees. The...
What is a strict settlement? A strict settlement is a settlement of land falling under the Settled Land Act 1925 (SLA 1925). Some strict settlements are in an elaborate...
The meaning of words commonly found in Private Client drafting and legislation which are intended to refer to children can differ depending on the context. This Practice...