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What is a trust?
A trust is a commitment made by one or more people (referred to as Trustees), to manage someone else's money. The commitment is made using a written agreement (deed). The Trust Deed creates legal duties and responsibilites for the Trustees. All the trustees and the person for whom the trust is being made are named. The group of trustees must sign the document, and someone who is independent from the trust must witness their signatures.
It is also necessary to inform the Inland Revenue about the creation of the trust, even though there will be no tax to pay. You should contact the Inland Revenue at the address show below and request a 'Form 41G (Trust)' which then needs to be completed and returned.
Inland Revenue Trusts
Huntingdon Court
90-94 Mansfield Road
Nottingham NG1 3HG
Tel: 0115 377 6520
In addition, the deed itself needs to be stamped by the Inland Revenue. The deed needs to be sent to the address below with a covering letter, return address and a cheque made payable to
'HMRC Stamp Duties'
The Birmingham Stamp Office
5th Floor
Norfolk House
Smallbrook Queensway
Birmingham B5 4LA
The Stamp Office Helpline will inform you of the fee payable and they can be contacted on 08456 030 135.
A trust deed needs to clearly state the purposes it is being set up for, and the powers of the trustees. A sample trust deed can be found below.
Who Should Trustees be?
The trustees should be drawn from family members, and wider contacts such as friends and neighbours, or people who have worked with the person and are now prepared to help on a friendly basis.
Having trustees who are drawn from a wider basis than family members can help provide safeguards for the Direct Payment recipient. Ideally there should be a minimum of three trustees.
If the person would struggle to manage money or employees, the trustees can act on their behalf, but they must always have that person's interest at the heart of any decisions that are made.
Trustees have a number of duties imposed upon them by law. for example, they must always exercise their powers in the best interests of the Direct Payment recipient, they must not profit personally or cause a loss to the trust fund due to a coflict with their own interests, and must comply with the terms of the trust.
The most important thing is that all the trustees must be committed to making the trust work for the person who is at the centre of it.
What will the trustees do?
1. Meet and decide what the aims of the group are and how it will be run. These ideas can be drawn up into a constitution, which will ensure that the group is clear about their purposes. it should include such things as who will be responsible for paying carers, for their supervision, and for completing the monitoring forms and PAYE.
2. Draw up the Trust Deed. Tne sample deed below can be used and personalised as necessary. If the trustees wish to obtain independent advice on the trust, the documents can then be shown to a solicitor.
3. Set up a bank account that must only be used for the Direct Payment.
4. Sign the Direct Payments Terms and Conditions - Trusts.
5. Complete the Contract, which details the amount of the Direct Payment and the service to be purchased.
The trustees will be responsible for recruiting personal assistants, and all the other responsibilities that go with being an employer. Please seek more advice on this from your local Independent Livign Centre.
Steps to Setting up a Direct Payment using a Trust
Information from a publication provided by the national Children's Bureau - 'direct experience' by Jeanne Carlin and Christine Lenehan 2004
The information here was provided by Norfolk County Council for the publication.
