Why have a trust and what benefit will it bring?
Trusts are often used to mitigate against inheritance tax but they are also a very good way to safeguard your property until such time as your beneficiaries are able to inherit.
Why have a trust and what benefit will it bring? Trusts are often used to mitigate against inheritance tax but they are also a very good way to safeguard your property until such time as your beneficiaries are able to inherit.
What is a Trust?
A Trust is a way to hold a property for the benefit of others (the beneficiaries) without giving them full control over it. It’s a way of preserving your wealth and can help to mitigate inheritance tax.
The trustees (these are the legal owners of the assets you’ve given control of) are the people that administer your trust on your behalf.
The 3 different types of trusts we offer are as follows:
Must be more than one person. In the hands of the trustees the trust is left to distribute at their ‘discretion’ to the beneficiaries, in whatever percentages are required. This is done by necessity and need rather than simple desire. This big advantage of this type of trust is its flexibility. A letter of wishes should be added to this trust to help advise the trustees of the testators reasoning in choosing a discretionary trust.
For one person, can be a child or grandchild. For them to inherit absolutely at a given age....usually 18 years old.
Life Interest Trust
As the wording suggests this gives the benefactor a life interest in the property without them actually having any financial interest in it. Best described when one person owns a property after divorce / widowed then remarrying with their new partner/spouse living in the property when their partner dies. Then leaving said property in their will to their children thus keeping the property in their bloodline. The partner then has a life interest in the property but as the property is in a trust they cannot pass it on in their will.