Protecting You and Your Business: Using Trusts

Whether you are looking to protect your business or personal assets, at Hysons, we pride ourselves on providing professional accounting advice. One area that we support our clients in selecting the most suitable forms of trusts to protect funds and property. 

Keep reading to understand what a trust is and the role it plays in managing important assets.

What Is a Trust?

Professional financial planning is important in many situations. One example of a legal arrangement that can be used to protect assets is establishing a trust. A trust is an agreement in which the settlor transfers ownership to another person or entity. An agreement is then created between a settlor (the founder/original owner) and the newly appointed trustee.

It’s also important to note that this is a form of business planning as trusts are designed with beneficiaries outlined. These are individuals or groups who are entitled to benefit from approved assets as predefined periods of time. This agreement is bound by the trust deed which is a legal document that remains in place until the end of the trust period or until an extension is confirmed by the original settlor.

How Can Trusts Be Optimised to Protect Individuals and Their Business?

Although there are many situations in which trust agreements can be optimised, they are perhaps most effective when used to protect assets. The reality is that when managing a business, there are always associated financial risks. However, opting to include certain assets within a trust means that should financial struggles become an issue, they can’t be classed as items included within cost recovery exercises. 

One of the most popular methods of doing this is ensuring personal assets are not associated with business liabilities. This means that should debt arise, only assets assigned to a company itself can be included within any lawsuits or court orders. In this case, moving assets to a trust means a trustee technically has ownership. Examples of personal assets that can be placed in a trust include properties or vehicles. 

Trusts can also be designed to balance control and ownership in the favour of the settlor. By this, we mean that although trustees have legal ownership of assets, a requested degree of control can still be retained. Offering the best of both worlds, this means the benefits of having access to assets, such as reduced liability, can still be accessed with a lower overall level of associated risk.

As well as offering a viable way to reduce threats to a potential business’s value and longevity, trusts are also helpful when it comes to succession planning. By ensuring plans are in place for the future transfer of assets, processes are overall much smoother and free from costly taxes. 

Seek Support in Managing Trusts With From Hysons

Overall, using trusts is a proven way to strengthen tax planning and improve overall protection. Our team has experience in ensuring both business and personal assets are managed efficiently to ensure companies have enough equity without running the risk of losing assets. 

To learn more, click here to explore our business planning or get in touch with us.