Trusts and lifetime planning

‘Trusts’ go back to medieval times when knights needed to make arrangements so that their estates could be looked after whilst they were away for lengthy crusades. The idea is quite simple – one or more persons, the trustees, hold money or property for others.

Trusts have many uses today. They can be used to protect assets for vulnerable family members such as minors or the mentally disabled who are unable to deal with their affairs themselves. Trusts help to minimise tax charges, usually inheritance tax and are often an effective way of preserving assets for the next generation. They’re frequently found in Wills but can also be created during lifetime.

Some of the more common uses of a trust:

In Wills to hold a share of a couple’s house for the benefit of the surviving spouse or civil partner and then for the children outright, or indeed anyone else. This can be a useful way of minimising the impact of nursing care fees on a family’s wealth if the person who’s left needs to go into care.
In Wills where there are vulnerable beneficiaries, mentally incapacitated beneficiaries or beneficiaries who are bankrupt and are unlikely to be sensible with the funds received.
In Wills where provision needs to be made for youngsters.
As part of lifetime inheritance tax planning where outright gifts to people aren’t appropriate. Often this is for the same reasons trusts are used in Wills but here they are set up during lifetime.
Trusts still sometimes have a place in Wills to minimise the amount of inheritance tax payable on death.
As part of an asset preservation exercise during lifetime. This is a complicated and difficult area but trusts sometimes have a role to play in securing family wealth for future generations.

Take advantage of our free initial consultation by calling us now or using the contact form located on this site to find out more.

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