Will Trusts

What is a Trust?

What is a trust and why?A trust is simply the way in which property can be held for the benefit of others and it can offer increased protection of your assets for your loved ones. Creating a trust in your Will leaving assets or capital in trust allows you to control their use after your death and protect your home and savings. It's a legal arrangement and you would nominate "trustees" who would be responsible for managing the trust and carrying out your wishes.

Why do I need a Trust?

Trusts are very useful when planning how money and assets should pass from one generation to another and may be set up for a number of reasons:

Property Trust

A Property Trust allows a home owner or co-owner to safeguard their share of the house for their children or other relatives in the event of their survivingProtect your home with a Trust spouse remarrying, having further children or requiring long term care. To prevent the surviving spouse being forced to sell the house, the gift to the children can be delayed until the surviving spouse has died.

Life Interest Trust

A Life Interest Trust is similar to a Property Trust, in that property or other assets, such as shares or investments can pass to an individual for them to benefit from for the rest of their life, and then upon their death, for the capital to pass to someone else.

Flexible Life Interest Trust

A flexible life interest trust protects your assetsA Flexible Life Interest Trust is a combination of a  Property Trust and a Life Interest Trust and is designed to ensure that property and other assets are safeguarded for one’s own children. The trustees can be given wide flexibility to loan or advance capital to the surviving spouse.

Discretionary Trust

A discretionary trust is one where trustees have 'discretion' about how to use the income of the trust, and sometimes the capital for the benefit of the ultimate beneficiaries. These are very flexible trusts and are useful in several situations, such as when you wish to leave capital to enable a disabled child, vulnerable adult or elderly parent to be cared for. Or for unmarried couples a discretionary trust can help to utilise the nil rate band to minimise inheritance tax. You can also leave funds in a discretionary trust to a class of beneficiaries, such as "my grandchildren".

The benefits of Trusts

  • You decide who benefits and under what circumstances long after you die or make the gift.
  • Capital and houses can be protected from divorcing spouses or second marriages.
  • You can shelter up to half the value of your home from long term care fees and still retain income from the sale of the house.
  • Your children can be prevented from squandering your money when you die.
  • Disabled children can have money held specifically in trust and can enjoy tax benefits as a result.
  • Unmarried couples with children can arrange for homes up to £650,000 to pass to their children while allowing a surviving partner to have the family home until they die.
  • A trust can help succession planning in a family business.

For advice on Trusts:

Call us on 0118 954 3201