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Discretionary trusts, often referred to as bloodline trusts, or family protection and wealth trusts, are means to ensure that your wealth and assets remain with your family unit. These kinds of trusts protect your wealth from the risk of being included in family divorce settlements or bankruptcy proceedings. There are a great many benefits to setting up a bloodline trust. However, it is essential that it is set up correctly in order to get the full benefit from the trust. Working with our specialist solicitors will ensure you get the outcome you require from setting up a bloodline trust to protect your wealth and assets. Lewis Nedas have a dedicated team of expert trust solicitors who can provide a comprehensive trusts service, allowing you to feel confident that your family wealth is protected. Contact us today to find out how we can help.

What is a trust?

A trust is a legally enforceable agreement allowing a person to put assets into the trust to be held so that others may benefit. The person who creates the trust is called the donor or settlor, the people who deal with the trust are called trustees and the people or who benefit from the trust are known as beneficiaries.

The trustees must act in accordance with the terms of the trust, which are usually contained in a formal written document.

Many people are confused by the different types of trusts, however between discretionary, bloodline and family trusts there is little difference.

A discretionary trust is established by the person who sets up the trust (settlor) and run by the trustee(s) who have the power to choose at their discretion what is paid to each beneficiary under from the trust in accordance with the rules set out in the trust deed. The term ‘family trust’ or ‘bloodline trust’ is simply used to refer to a discretionary trust that has been set up to hold family assets or to conduct family business.

How do discretionary trusts work?

There are four parties to a discretionary trust:

The Settlor – This is the person who sets up or creates the trust, normally a lawyer or accountant. After the trust has been set up, this person will normally have no further involvement in the trust.

The Trustee – This is the person specified in the trust deed to become the legal owner of the property but does not benefit from it. This person carries out transactions on behalf of the trust, makes decisions and signs documents. The trustee must act in the best interests of the beneficiaries to the trusts at all times.

The Appointor – The appointor of the trust has the power to remove and appoint the trustees to the trust. The appointor will usually remove or appoint a trustee in the event of death, or where a trustee is no longer able to perform their duties.

The Beneficiaries – The beneficiaries are the people who will benefit from the trust assets. The beneficiaries do not have any interest in the property or money that forms part of the trust. However, they have an enforceable right to be considered when the trustee makes the decision to distribute money or property from the trust.

What are the benefits of a discretionary trust?

People set up a discretionary trust for a variety of reasons. The most common reasons include:

- Asset Protection

- Estate planning

- Tax benefits

Bloodline or family protection trusts are often used to protect family assets from being lost under certain circumstances. When not protected by a trust, family wealth and assets may be vulnerable to:

- Bankruptcy or financial issues

- Divorces in future generations

- Inheritance or other types of tax

A bloodline or family asset protection trust can ensure that your money or property may only be accessed by your children or future generations. You can ensure that those who have married into your family are unable to obtain access to your family wealth.

A good example of this type of trust in use is the situation where you pass away, and your spouse remarried and has children with their new partner, without a bloodline trust those children may be entitled to a portion of your estate

Are there any disadvantages to using a trust?

After you have set up your trust, legal ownership of the assets to be held in the trust pass to the trustees. The trustees will then be in control of the trust and will make decisions on how the trust assets in the trust are distributed. Once the trust has been set up, the settlor cannot vary the terms of the trust. If is for this reason that you must seek proper legal advice from a trusts expert. Our specialist team can advise you properly on settling up your trust to ensure your assets are held and distributed as you intend them to be.

Why use Lewis Nedas?

It can be difficult to predict the legal issues and challenges that will arise for you and your family in the future. However, we can help you prepare as best as possible. Our specialist lawyers will analyse and evaluate your assets and what you want to achieve by setting up your trust to provide a tailored solution for your asset pool.

Here in our wills and probate department, we pride ourselves on providing exceptionally high standards of customer service and exceptional trusts advice. Our service is personalized, and we can deal with all sizes of estates and wealth. If you are considering setting up a discretionary trust to protect your assets, contact our team today to find out how we can help you.

Contact Lewis Nedas Trusts Solicitors based in Camden, London

If you require any further information about setting up a discretionary, bloodline or family asset protection trust, or to speak to our solicitors please telephone us on  02073872032. Alternatively, complete our online enquiry form or contact Jeffrey Lewis or Richard McConnell.

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