These types of legal arrangements are typically used to:
When you place your assets into a trust, they technically no longer belong to you, because you have transferred ownership to the Trustee. This means that their value usually won’t be counted when it comes to calculating the inheritance tax that is due on your estate.
Trusts can be incorporated into your will, either by yourself or by a specialist will writer. When setting up the trust, you need to make sure that you include information on the assets that you wish to be placed into the trust, who the Trustee and your beneficiaries are, and whether the trust will become active straightaway while you are still alive, or immediately after you pass away.
There are many different trusts available. They range from simple to complex, and each offers its own inheritance tax benefits.
Three of the most common arrangements requested by our private clients are:
These are the most straightforward of all. In the event of death, all assets within a basic trust will be passed on to the beneficiary with no delay, as long as they are over 18 years of age.
This type of trust enables a certain level of income to be distributed to immediate dependants (the ‘life tenants’) straightaway, whilst ensuring that other assets are protected and passed on to other beneficiaries (the ‘capital beneficiaries’) at a later date.
The Trustee of a discretionary trust has complete power over how the assets within the arrangement are distributed. The Trustee is also allowed to make investment decisions regarding the assets that are held within it.
There are a number of trusts that you should consider adding to your Last Will and Testament. These cover areas regarding Bankruptcy, Property /Tenants in Common, Disability and Care Fee Planning. If you require any further information on the trust outlined below please contact us on: 01206 820638
By placing what is potentially your biggest asset into a property trust, it is possible to ring-fence some of the value of your home and ensure that a larger proportion of your estate is passed to your dependants. The property is taken out of the individual’s estate and placed in the Trustee’s care instead.
Individuals who are the main carer for a disabled person will understandably be concerned for their dependant’s welfare when they eventually pass away. Disability trusts – otherwise known in the UK as a ‘trusts for vulnerable beneficiaries’ – can simultaneously be used to make better arrangements for the disabled person’s welfare and reduce the Settlor’s income tax liability, as long as the beneficiary meets specific conditions set by the government.
To learn more about how setting up a trust could lead to better protection for your estate and incur substantial tax savings for your beneficiaries, contact Age Legal Services now. We’ll help you find a tax-efficient trust for your assets that suits your circumstances and your wishes.