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In the United Kingdom, five main types of trust have developed:
- *Interest in possession trust.* Interest in possession trusts
(sometimes called "life interest trusts") are often created as part of wills
and are structured in such a way that the surviving spouse, or "life
tenant", will have a right to receive an income for the rest of his or her
life, or for a fixed period at least.
- *Accumulation and Maintenance trust.* "A&M" trusts arose in the
1970s because of changes to UK tax law. They exist for young beneficiaries
and give the trustees discretion to pay money for their benefit. Until
recently they have enjoyed special tax treatment, but the Finance Act 2006
changed this.
- *Discretionary trust.* Trustees of a discretionary trust can often
choose the beneficiaries, based on a "class" specified by the settlor.
Alternatively, they may have a fixed group of beneficiaries to choose from,
but they can decide which beneficiaries (if any) are to benefit and to what
extent, so long as the decision is based on the beneficiaries' best
interests.
- *Bare trust.* Where there is a bare trust, the trustees can deal
with the property as usual but the beneficiaries have an absolute right to
demand any or all of the property at any time. The trustees are therefore
mere agents of the beneficiaries. In the USA the term *simple
trust*is used (see below).
- *Charitable trust.* Charitable trusts have a unique position in
English law. They have special tax advantages, they do not have to end after
a certain period of time (unlike other types of trusts), they will not be
void if their objects are uncertain. They encourage charitable giving.
