What is a Beneficiary?
A beneficiary is a person who may benefit from the proceeds of a trust.
They have no right to demand that they be paid money from the trust.
It is up to the trustees to decide which of the beneficiaries, and in what proportion, any of the beneficiaries will be paid any money from the trust.
Therefore, the beneficiaries have no control over the trust assets; they are simply passive potential recipients.
It is extremely important that the settlor cannot benefit from the trust. If the settlor is a beneficiary, this is called a reservation of benefit and the trust proceeds will be counted as part of the settlor's estate for Inheritance Tax.
