I get a lot of questions about trusts and there's no doubt that they are a misunderstood

and underused aspect of financial planning, but they can really make a difference, so let's talk

about trusts. trust. I remember being introduced to the idea of trusts when I was sitting my basic

finance exams 22 years ago and I remember just thinking there were really esoteric and abstract kind of

concept and they are in a way. But my job now is to make it not like that for you. So let's put five minutes on the clock down here and

say a quick thank you to my friends at Seven Investment Management for

continuing to sponsor the show down here and let's crack on. So today I want to

introduce the idea of a trust and then next week and I think probably the week after

just look at the actual applications of how they can be used in financial planning. So the easiest way I think to think about a trust is as a

box. Now I was going to have a prop, but you people understand what a box looks like, right? So the idea of a

box is that you put stuff in it and that is now separate from your other

stuff it's in a box and it's kind of self-contained. Essentially what you're

doing is you're removing the stuff in that box out of your

personal control and into the control of some other people called your

trustees. Now this is a good time to mention that there are actually three parties to any trust arrangement.

The first is the settler, or just settler most people call it, and that is the person or people

setting up the trust and dictating its terms.

They are the people placing assets, whether that's money or whatever, inside the trust.

Next you have the trustees and they are the people

tasked with looking after the box and its contents on your behalf. Now it's very

normal for the settler to be a trustee so you can wear two hats in this

whole weird metaphorical game we're playing here but a trustee's job is to look after

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