Clients include a trust in their Will to protect and preserve assets so their family is well provided for. Such assets can include property, money, shares, investments or antiques. Trusts ring-fence these assets and give more control over what happens to them. Placing these assets in a trust can ensure that they are managed in exactly the way the client intended. This can have advantageous implications with regards to Inheritance Tax liability, future care home fees or in preventing sideways disinheritance.
Further advantages of trusts include the fact that assets placed in trust do not need to go through the probate process. They can be accessed immediately which can save a lot of time and money for beneficiaries. Additionally, assets placed in trust can be protected from being assessed in any repayment of bankruptcy or divorce settlements beneficiaries may become involved in.
A Will Trust is a trust that as been written into a Will and only comes into effect after death, which means that it can be amended at any time, if a client wishes to do so. It also means that the client remains in control of their assets during their lifetime.
What type of trusts are available ?
Accumulation and Maintenance Trusts safeguard monies for children. The idea is that the money is invested for the children until they attain an age specified in the Will. The age can be anything from 18 upwards but the usual ages are 18, 21 or 25.
Discretionary Trusts Sometimes, certain circumstances may make it difficult to ascertain how much money a beneficiary is going to need and when they are going to need it. This is particularly true when making provision for children, vulnerable or dependant relatives. A discretionary trust gives the chosen trustees the power to give varying amounts of money to a number of potential beneficiaries as and when they need it. The fund for the rest of the time is being invested for them.
Lifetime Interest Trusts allow the client to ring fence assets to prevent the loss of their children's or any beneficiary inheritance whether unintentional or intentional through the later remarriage of a partner. It can also ensure that a current partner is guaranteed a place to live for their lifetime.Furthermore, it can be used to prevent a proportion of assets being used to fund care home fees in later life
Nil Rate Band Discretionary Trusts can reduce the amount of Inheritance Tax that is payable on an estate which is valued over a certain threshold. They are particularly useful for unmarried couples as they cannot benefit from the spouse/civil partner Inheritance Tax exemption.
Flexible Life Interest Trust
This type of trust shares characteristics of both a life interest and a discretionary trust. It is, as the name suggests, flexible allowing for adequate provision for the surviving spouse but also giving the trustees the power to rearrange assets during their lifetime.
Do I need a Trust in my Will ?
Whether to include a trust in your Will is a personal choice that depends on your financial and family circumstances and what you wish your Will to achieve.
There are a number of common reasons why people consider the use of a Will Trust;
If they have blended or complicated family structures such as step families, divorces, children from a previous relationship, family disputes or no obvious beneficiaries.
Where there are more complex financial situations, with larger estates or assets.
In cases where there are concerns over beneficiaries managing the funds adequately.
If they own business assets.
Couples who own property jointly.
When a couple are unmarried and have substantial estates.
The information on this page is intended to be a basic overview of the trusts Cloveroak Wills can advise on and complete. It is a complex area and this is why we offer free no obligation consultations to help you determine if a trust is something that may benefit you.
Everyone's family and financial situations are individual to them. We understand this and provide advice and solutions tailored to each client's needs.
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