Author: Adrian Wallace (2001)

Adrian Wallace sheds new light on an often overlooked risk in the creation of trusts
(taken from Issue No 17 –  October 2001)

Introduction
Most express trusts are no doubt created for honourable reasons. The typical Settlor will perhaps create a trust so as to achieve tax planning objectives, or to secure the transmission of his assets down the generations, or for charitable or other noble purposes. Whatever the reason for the creation of the trust, the Settlor will no doubt be told firmly by his legal advisers that once he has transferred his assets into a trust, he has surrendered dominion over them and cannot exercise any direct control over their destiny. This key feature of a trust may be viewed as a potential disadvantage by the typical Settlor. Unfortunately, there is a certain category of Settlor who may view it as a positive advantage – the type of Settlor whose purpose in creating the trust is to put his assets beyond the reach of his creditors.