The introduction of capital gains tax in 1965 and the abolition of estate duty surviving spouse exemption in 1974 marked a radical change for trust solicitors and managers who practised from 1925 to 1965, when trusts were regarded as the preserve of lawyers and the law itself had been simplified.This was followed by various legislative attempts to stop 'creative' tax avoidance schemes which resulted in different regimes for the taxation of discretionary trusts.

Holdover was invented, introduced and partly removed.

Indexation was introduced and amended.

In short, trusts have become a taxation minefield for the average solicitor and require anyone involved with them to maintain full and up-to-date accounts and records.As lawyers we have allowed our traditional role to be taken over by accountants, bankers and others.

Is it worthwhile trying to recover lost ground or should we simply cease to be involved in this type of work? There are several reasons why, in the current economic conditions, private client work, and trust work in particular, should be developed: computer programs are now available which are capable of processing trust work; word processors are becoming more sophisticated; staff are more likely to be receptive to new ideas and working practices; and present staff will tend to stay and it is worthwhile training them and, where necessary, acquiring and training new, younger members of staff.There can be no doubt, I believe, that trusts will continue to be created.

The accumulation and maintenance settlement has become well established and has tax advantages.

Trusts for the disabled (who now have a longer and more normal life expectancy) will be set up by parents who may not now survive them.

Above all, however, a high divorce rate will often provide the need for a testator to create a trust.The increase in the use of pensions and life policies and the generally greater wealth of society mean that trusts will no longer be funded, in the main, by landed estates but by quoted investments, the shares in family companies, unit trusts and the like.

New trusts are likely to need more active management and can be more profitable to the profession than in the past.Trust work can easily lead to other work.

Very similar to trust work is the management (on stockbroker's advice) and organisation of a client's investments and other funds.

Many clients, particularly as they grow older, find that they are incapable of managing their investments properly or feel that their surviving spouse does not have the knowledge to be able to do so.

They need to hand over the record keeping and paperwork, and who is better able to fulfil the task than a solicitor whose ability to manage investments may have already been established, perhaps in the running of a small family trust?If therefore the future of trust work is reasonably secure, what are its advantages and disadvantages? One of the main advantages is undoubtedly the fact that it can provide a steady stream of work which, if done efficiently, can be profitable.

Compare for example the income received over 30 years from a handful of trusts worth £250,000 each with that received from a number of some of your practice's corporate clients.

Consider the cash flow benefits of billing regular amounts quarterly with few collection problems and also the benefit of a steady flow of work which is at a level which you, as a partner, can gauge and usually easily delegate.Unfortunately the problems of trust work are many; they break down perhaps into two categories.

The first is administrative: the sheer volume of paperwork; the need to have a large amount of information readily to hand and to be able to collate the figures periodically into accurate and comprehensible accounts.

The inefficient handling of papers (such as the temporary loss of any document) increases the amount of time spent and therefore tends to increase the amount of the bills, which in turn causes client dissatisfaction.

Sometimes it seems that some trusts are inherently inefficient and unprofitable, for example because of the nature, location or number of trustees, holdings and beneficiaries.The only answer is to establish efficient working practices and to ensure that the trust is being run properly and cost effectively.

An hour's management time in the first year and subsequent reviews will show worthwhile returns.

Does the fund really justify the attention of four trustees? Can the long list of holdings of modest value be rationalised? Can the income be dealt with more satisfactorily? Is the trust fulfilling the purpose for which it was established? Is there any additional service that can be provided to the trustees and the beneficiaries?Secondly, the complexities of trust law and taxation.

Consider the CGT legislation; the elections under the Finance Acts 1968, 1985 and 1988, the identification rules under the Finance Acts 1965, 1982, 1985 and 1988; the indexation rules, the provisions relating to held over gains and re-basing, the charge on deemed accrued income and the CGT treatment of de-merger issues.The only answer to this is to ensure that the trust is dealt with by staff of sufficient competence who are also able to call upon experts in various fields for support and training.

Some seven or eight years ago we did our best to analyse our philosophy so far as the management of the trusts in the office was concerned.We felt that in many cases our role seemed to have become that of a postbox; we were perhaps dealing with matters that were of great consequence to a number of our clients not as efficiently as we might have been.

The preparation of accounts was somewhat haphazard and all the fee-earners seemed overworked and surrounded by piles of paper.

The group then consisted of a number of partners and six fee-earners.

With the added benefit of hindsight our experience may be of help to others faced with a similar problem.In response to a query as to where we anticipated new trusts were to come from, we decided that we wanted none for the moment.

We set about, so far as we could, removing from our list those matters where redemption was impossible.

Clients who complained about our modest charges were asked to go elsewhere; a number of trusts were broken.This caused some consternation amongst the staff to whom we explained our plans.

It is vital to remember that disposing of unprofitable work permits time to be spent to better and more profitable effect on other matters without necessarily cutting down on staff.We set out various policies which we intended to follow including our determination to find and install a suitable computer system.

We aimed to attack what we saw as one of the core problems: too many trustees, many of whom were poor correspondents thus adding to administration expenses.

Many of the trustees were, of course, partners in the firm but when they retired a great deal of time had to be spent transferring all the investments into the names of new trustees.We therefore established a trust corporation to act as trustee and a nominee company to hold only trust and other private client investments.

Once we had prepared and circulated our brochures on these two organisations they were, to our surprise, welcomed by our fee-earners and also by our clients.

Gradually the number of stock transfer forms circulating amongst trustees began to dwindle.

Our corporate colleagues started enquiring if they could use the trust corporation for pension schemes and employee share option schemes.In consultation with the staff, we started to standardise documents, letters and, wherever possible, methods of practice.

We insisted that dividends were mandated either to the life tenant's bank account or to a designated account with our bank so that the funds could be transferred to our client account for distribution or investment as required.We explained our policies to the partners who dealt with the private clients, seeking their support and asking them to ensure that when setting up a trust they did their best to point out to the client how it could be run most economically and efficiently.

We analysed the cost of running a typical A & M trust so that when asked we could also quote a realistic figure for our fees.The Financial Services Act we initially regarded as something akin to impending doom.

As a matter of policy we felt that, whether or not we were involved in discrete investment business, we should have a key role; we did not wish trustees to enter into direct agreements with stockbrokers.

We therefore prepared our own agreement based on the Law Society's recommended form.

We felt that we should take the opportunity of including in it our terms and conditions and explaining the work we undertook.Trusts were to be billed annually.

If the costs exceeded £500 then, at the half year, an interi m bill (amounting to 45% of the last annual bill) would be automatically rendered and funds transferred without reference to the client.

If the annual bill exceeded £1000 a percentage would be taken each quarter.

Our conditions would state that the bill for our annual costs should be paid, by transfer from client account, after six weeks and would be deemed to be approved unless we heard to the contrary within six months.Compliance with the Financial Services Act also reminded us that we were responsible for a large amount of our clients' funds through the services of a large number of brokers.

In many cases the link with the broker was purely historical.

We therefore selected three key brokers, transferring portfolios to them whenever the opportunity arose.

It is important that those involved with trusts understand the stock market and are aware of the current climate.Also, we felt that many portfolios would benefit from being reviewed at a meeting of our staff and the stockbroker; this would bring the stockbroker's written periodic report more into line with the trustees' and beneficiaries' thoughts and requirements.

We therefore initiated periodic meetings with some of the brokers in our offices where they and the fee-earners could review the market generally and look at each portfolio briefly to ensure that all was in order.

This proved a good selling point to our clients; it greatly improved the understanding we had with the brokers concerned and their service to us and our clients.

After a great deal of effort and with the enthusiastic support of our staff we managed to re-organise and adapt our practices.