There are a number of circumstances where the creation of a trust is the best way to manage your financial affairs and protect your wealth for your family. You can create a trust during your lifetime or by your Will.
You may for example consider the creation of a trust to manage funds for your children or a vulnerable beneficiary, reduce your Inheritance Tax liability, preserve family wealth in case of divorce or bankruptcy or protect money received following a personal injury claim.
As part of the estate planning process, our Wills, Trusts and Probate team can provide advice as to how creating a trust could potentially benefit you. We can also help with the ongoing administration of your trust if required.
- How can I use trusts for lifetime tax planning?
- Can I make provision for my children?
- What about personal injury trusts?
- I have been appointed as a trustee, what are my responsibilities?
How can I use trusts for lifetime tax planning?
Trusts can be used in a number of ways to reduce the amount of Inheritance Tax paid by your estate on your death. For example, many people who are entitled to a death in service benefit, a lump sum pension payment or have a life assurance policy simply nominate their spouse to receive these payments. You can protect these payments from Inheritance Tax and still provide for your family, by creating a trust during your lifetime into which these funds can be paid.
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Can I make provision for my children?
You can use a trust in your Wills to make long-term provision for your children. A trust will allow you to specify the age at which your children inherit from your estate, and determine who should be responsible for looking after their money until they reach that age.
A trust for your children is even more important if you have remarried and have children from a previous relationship. By creating a trust you can make provision for your new spouse during their lifetime, while ultimately protecting your assets for your children.
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What about personal injury trusts?
If you have successfully won a case following a personal injury you have suffered, you may receive a lump sum payment. If you are receiving means-tested benefits, this lump sum can affect your eligibility for benefits, forcing you to spend and diminish your capital payment.
To protect this capital payment a trust can be created which allows you access to your funds, while preserving your right to receive means-tested benefits.
I have been appointed as a trustee, what are my responsibilities?
If you have been appointed as a trustee you will have a number of legal duties and accountabilities towards the beneficiaries of the trust. If you do not carry out your duties in accordance with the law and the specific terms of the trust, you may be personally liable to the beneficiaries of the trust for any losses arising
We can provide advice on the proper running of a trust, including assisting you in the preparation of annual trust accounts, preparing and submitting the relevant tax returns for your type of trust and advising on the correct distribution of the trust funds.
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