Private Trusts Financial Planning Cycle

Although each Trust is treated individually, the general approach adopted by your Turris adviser will normally follow the cycle below:

Step 1 - Disclosures about "Turris"

At the beginning of dealings with Trustees, full disclosure is made from “Turris” in terms of “who we are, what we do, how we do it, how it benefits the Trustees and the beneficiaries, how we are paid and how we update the trust’s investments on an ongoing basis".

Step 2 - Disclosures from the Trustees

This involves obtaining all of the appropriate information necessary to allow us to provide the appropriate investment and tax advice.

In addition to receiving the appropriate trust documentation, we would normally arrange an initial meeting with the trustees.  At this first meeting, we would discuss the trust objectives, the appropriate risk profile for the trust portfolio and the relevant tax treatment of trust investments.  With the new legal and taxation changes, common issues for Trustees now include: 

1. Ensuring the Trustees are compliant with the new legislation effective from 6^th April 2006, i.e. “The Charities and Trustee Investment (Scotland) Act 2005”.

2. Ensuring the Trustees fully take into account the new tax position for both the trust and the beneficiaries following the introduction of: 

“Modernising the Tax System for Trusts”, much of which came into effect on 6^th April 2004.

The tax changes will require many Trustees to review the suitability and appropriateness of the trust investments.

3. Flowing from the above, many Trustees will want to ensure they have taken account of:

“…..the standard investment criteria of suitability and diversification” (as defined) 

“…..the need to keep investments under proper review”

 “…..the need to consider the cost of administration, including the cost of taxation”

 “…..the need to take proper investment advice from a suitable investment adviser”

The new legislation will place a greater onus on Trustees in the above areas

Step 3 - Research of the Whole Marketplace

Having agreed the key objectives, the appropriate risk profile and the tax treatment of trust investments, the next step is for us to review the whole marketplace for suitable investments to include within the trust portfolio.  This ensures we recommend the most suitable investment portfolio to the Trustees.

Step 4 - Prepare Written Report and Recommendations

All of the relevant information and research results are summarised in a written report for the Trustees.  This written report helps to evidence the factors which the Trustees have taken into account when considering the suitable and appropriate investment of the trust assets.  This helps to evidence the Trustees' compliance with the new legislation and the new tax regime.

Step 5 - Second Trustee Meeting

During the second meeting, the written report is discussed to ensure it properly reflects the Trustees’ circumstances and wishes.  The specific recommendations are discussed in detail and Turris will then take the Trustees’ investment instructions – either at the second meeting or, if appropriate, after the Trustees have discussed the recommendations further.

Step 6 – Issue of Trust Investment Documentation

The investment documentation is collated and checked for accuracy by Turris.  Upon receipt of all of the investment documentation we then forward the complete documentation package to the Trustees for their records.

Step 7 - Agree Next Review Date

The last step in the process involves agreeing with the Trustees, the next review date.  This is often six monthly but can be more frequent if required.  This review involves returning to Step 1 and repeating the financial planning process.