There are many types of trusts. They are set up by a donor or settlor who place the assets in the possession of a trustee to look after them for the beneficiaries, the people the donor or settlor intended to eventually give them to.

They are just a legal contract establishing your wishes.

Bare trusts

Bare trusts are simple to administer and benefit from the gains being taxed at the beneficiary’s marginal tax rate. However, they are not very flexible.

Discretionary trusts

Discretionary trusts are flexible and allow the trustees to do things like change the beneficiaries. Changes can be Limited by the settlor when the trust is established.