Trusts & Wealth Protection
Setting up a Trust may be the ideal solution if you are looking to minimise the amount of Inheritance Tax payable after your death or are considering ways in which you can provide for your family and other relatives during or after your lifetime.
We can help with:
- Tax Planning through Trusts
- Trust Administration
- Special Needs Trusts
A Trust or Settlement is a fund which contains assets that are controlled by you and / or a nominated third party for the benefit of a specific individual(s). They are governed by complex legal regulations and separate tax rules. A Trust can be set up at any time during the lifetime of an individual to become operative immediately or upon your death.
Trusts can be created under the terms of your Will, or separately. They can take various forms, for example:
Grandchildren
Grandparents often set up Trusts during their lifetime to provide funds for their grandchildren’s education and additional expenses. Any funds that remain in the Trust when the grandchildren have completed their education will be paid to them, when they reach a specified age. In addition, many grandparents wish to leave their grandchildren a cash gift in their Will. If it is a substantial amount the gift may be held in a Trust until they reach the age of 18 or a later specified age.
Provision for Family on Second Marriage
Many people remarry and have 'a second family' with their new spouse. Trusts can be used to provide for a new spouse whilst also preserving funds for the children from both the first and second marriages.
Tax Planning
Placing assets into a Trust during your lifetime can help to minimise your Inheritance Tax liability. Any assets held in a Trust do not form part of your estate when you die and may escape Inheritance Tax, if sufficient time has passed since you placed the assets into the trust.
In the case of a married couple or civil partnership if it is a second marriage, assets which you put into Trust under the terms of your Will can, without depriving your family of access to those funds, ensure that after the death of your second spouse, your children receive their inheritance.
It is also possible to place any Death in Service Benefits (which may flow from a pension scheme membership) and Life Policy Proceeds into a Trust Fund. By placing these interests in a Trust you are ensuring that they do not form part of your estate on your death and will therefore not be subject to Inheritance Tax. As the benefits are usually only paid out in the event of your death (i.e. you would not benefit from them directly) this is a good method of reducing your inheritance tax bill.
Special Needs Trusts
Someone who has been awarded damages as a result of a successful personal injury claim should consider establishing a Special Needs Trust in order to safeguard their financial position. Such individuals often receive means-tested benefits but a subsequent award of damages, for even a modest amount, may lead to them losing any State benefits they receive. Establishing a Special Needs Trust can help to ensure your overall financial position is not compromised as a result of damages being awarded.
Our experienced team can assist you with all aspects of Tax Planning and Trusts. We can offer clear advice on the types of Trusts available and provide practical support for the day to day administration of Trusts, including the preparation of annual accounts and the submission of Tax Returns on behalf of the Trustees.
