Trusts
Why Set Up a Trust?
Trusts can play a very important role in safeguarding your assets for the future, especially if you want to leave money to your children.
Trusts ensure that your money, when managed by a trustee, is put to one side and can be made available to your children / loved ones when they reach a certain age.
Some of the benefits for creating a Trust are:
- To avoid taxes
- To protect your beneficiaries inheritance should they be suffering from financial or matrimonial difficulties
Our Wills, Trusts and Probate solicitors can help you create a Trust which will cater for all of your needs.
A Trust can be set up in your lifetime or in a Will. In both cases a “Trustee” must be appointed to manage your assets on behalf of the “Beneficiaries” according to the terms of the Will or Trust.
There are several types of Trusts that you can set up:
Bare Trusts:
- The simplest type of Trust
- For Trustees to hold assets for children until they reach 18
- Helps avoid inheritance tax by giving away assets to children or grandchildren but by ensuring they don’t have access to these assets until they are 18
Life Interest Trusts:
- A capital protection trust
- Used to protect capital in second marriages to benefit children from a previous relationship
- Allows the beneficiary access to income only i.e. a Life Tenant
- So that capital is preserved after the death of the Life Tenant
A Life Interest Trust devised in your Will for your partner enables your estate to be Inheritance tax free upon your death and that upon your partners death, the capital will pass to your loved ones.
Discretionary Trusts:
- A common trust
- Where none of the beneficiaries has a right to a fixed share of the assets in the Trust
- The Trustees have the discretion to decide as and when, and how much each beneficiary will receive
- This helps to protect assets from third parties
- The trust is often set up with one person in mind who is vulnerable in some way (disability, immaturity, risk of divorce or bankruptcy)
- Can offer peace of mind as your loved ones will not suffer financially due to their vulnerability
Trustees:
- Careful selection of your Trustees is essential
- A Trustee has to act collectively and in the best interests of the beneficiaries
- Trustees can only act as per the terms of the Trust
- You can choose a family member, friend or a professional to be your Trustee
Contact our Wills, Trusts and Probate team who can arrange a meeting with you and talk you through the setting up of a Trust process on 0161 926 9969.
