The Paramount Network's hit TV series, Yellowstone is now available to UK audiences via Amazon Prime (frustratingly only the first two seasons at present).
For those unfamiliar with the show, it follows the Dutton family; a ranching family in Montana led by patriarch John Dutton (played by Kevin Costner) as they strive to save their ranch and fend off challenges from all comers.
John adopts a range of tactics in the defence of his ranch. Towards the end of the first season, he turns to the law for defence (the majority of the show does the exact opposite!). In particular, he turns to the law of trusts and asks his trusted daughter, Beth Dutton to "put the ranch in a trust".
Why use a trust?
Why did John Dutton decide to place his family ranch into a trust? Without giving away any spoilers, the short answer is that he was seeking to protect the ranch for the benefit of his rather troublesome children. The ranch has been handed down the generations, and John is desperately trying to do the same for his children.
Not all of us will have the largest ranch in Yellowstone to protect, but most of us at some stage in our lives will have assets we wish to protect either for our own future use, or for a loved one over time. Trusts can be an effective tool in providing that protection.
Types of trust
There are various forms of trust, and each structure has its own benefits. The most effective trust structure will depend on each client's circumstances.
A discretionary trust is the most flexible trust structure available. You appoint trustees to manage the trust assets, and give your trustees full discretion to make future decisions concerning the trust. You also nominate potential beneficiaries who you intend to benefit in future. The amount each beneficiary receives is not fixed, but instead is subject to your trustees' discretion. It is standard practice to record your wishes for the distribution of the trust assets via a Letter of Wishes.
A liferent trust is also commonly used. This is often used in relation to property, and can be an effective estate planning tool for second marriage, or step family scenarios. It operates by appointing specific beneficiaries a right to the use and income of trust assets for the remainder of their lifetime, or until termination of the trust. For example, a husband can leave his share of the family home in liferent for the benefit of his wife, and on the wife's death the ownership can pass down to their children. In this scenario, the surviving wife would have the right to live in the property, or to receive rental income if it were ever let out, for the remainder of her lifetime without ever receiving the capital/ ownership of the property from her late husband's estate. This structure can have several benefits.
It is worth reviewing your estate on a regular basis, and as your circumstances change. If you have assets you wish to protect, professional advice should be sought to determine whether a trust would benefit your circumstances. In some circumstances, a trust may not be appropriate and professional advice is recommended to consider alternative options.