Essentially there are two types of trust;
An Non-discretionary provides that the trustees must pay trust income upon request to the beneficiaries, they are not in a position where they can refuse. With a Discretionary trusts the trustees have the option whether to make payment to the beneficiaries or not. Being able to decide whether the trust income or capital should be paid or withheld from the beneficiaries as the trustees think fit. This type of trust has advantages against claims made to recognise the trust property as useable to pay for someone’s long term care.
Many people are coming to see the advantages of using trusts. Not only to pass assets to another generation, but also usable during their own lifetimes to manage assets or commercial properties. A trust allows an individual to have control over assets and to manage inheritance tax liabilities, together with making provisions for future generations which often a will cannot do.