When it comes to Trusts our team of solicitors specialising in wills and trusts are extremely experienced in handling this notoriously complicated area of law.
Trusts can be a hugely effective way of protecting your assets and passing them on to the people and causes that you support.
Our trust solicitors are able to offer expert advice in an easy-to-understand way to ensure that you are able to take advantage of all the potential benefits of setting up a trust.
Trusts can form a corner stone of estate planning often offering very tax-efficient ways of protecting your assets from futures costs such as Inheritance Tax or residential care home costs.
There are a number of good reasons for setting up a Trust, including:
- Asset protection
- Reducing Inheritance Tax liabilities
- Protecting the assets for people under the age of 18
- Allowing you to provide gifts while retaining control of the assets
- Protection from residential care home fees
- Creating tax efficient inheritance for your children
- Protection against business failure
- Protection against division of assets in the event of separation and/or divorce
- Protecting the assets of those who are disabled or suffer from reduced capacity
- Preserving compensation paid out for an injury.
What is a Trust?
A trust is an arrangement where trustees hold assets, often property, for the benefit of one or more ‘beneficiaries’.
What types of Trusts are there?
There are various types of trusts but perhaps the one used most often is the Discretionary Trust.
- If assets are put into a discretionary trust and you survive 7 years, on death they will not form part of your estate.
- Assets can be transferred into them generally without incurring a Capital Gains Tax charge.
Why should I set up a Trust?
This is where a trust is used to pass shares in a family company or business to children. By using a trust, it is possible to take advantage of reliefs for “qualifying” business assets.
Estate and Tax Planning
Trusts are used by clients who wish to start passing monies or property down to the younger generations. The reason for using a trust is that the beneficiaries are not yet ready to hold those assets in their own right. A trust will allow you to provide for your children or grandchildren and begin the process of passing assets out of your estate for inheritance tax purposes, but retain control as a trustee.
Pass lump sum pension death benefits to family members. You may wish to provide for lump sum pension death benefits to be paid into what is commonly called a “By-Pass Trust”. This can minimise the IHT charge whilst still allowing the spouse or other family members to benefit.
Personal Injury Trust
Preserve compensation received from an injury. If compensation is received as a result of an injury you have suffered then by placing these monies into a special Personal Injury Trust means tested benefits will be preserved.
Why should I look at setting up a Trust in my will?
It is important to consider what the tax implication of your death may be especially for your children. You should also consider the best way of organising how your assets pass down the family, so one or more of the following may apply to you:
- Provide for a particular person during his or her lifetime, but with the estate (or specified asset) ultimately passing to someone else when that first person dies or remarries
- Make provision for minor or disabled beneficiaries
- To provide flexibility and allow decisions to be made regarding your estate depending on the circumstances in existence at the time of your death
- Consider a Discretionary Trust to preserve assets for children on second marriage and also “ring fence” assets when the possibility of nursing home care fees should be considered
Trust law is a complicated area of law and one in which you should always take specialist advice from one of our trust solicitors.
Are your existing Trusts still fulfilling their original objectives?
Many trusts were set up years ago may no longer fulfil their original objectives.
- Do you already have a trust in place, but have not reviewed it since the changes to the inheritance tax regime or would like to consider bringing it to an end?
- Are you a trustee of a trust requiring advice on your duties and responsibilities?
- Are you a beneficiary of a trust and would like advice as regards your position?
- In recent years new legislation and regulations have reduced the effectiveness and benefit of trusts, however they may still be relevant when it comes to your Estate Planning.