Trusts are legal devices that can be used to protect your assets for your chosen beneficiaries. They can either be included in your Will, or made during your lifetime.
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Trusts are complex structures, so we always recommend that you get legal advice, before making any firm decisions.
Types of Trusts
There are different types of Trust. Some can come in to effect by operation of law, such as on the death of a parent with young children. Examples are:
- Bare Trusts
- Flexible life interest trusts
- Disabled person’s trust
- Discretionary Trust
- Bereaved minor’s trust
Each Trust has its own set of benefits and suits different scenarios. We can advise whether a Trust would be advantageous in your circumstances, and if so, what type of Trust should be created.
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How do Trusts work?
When you leave a gift in your Will, it is given to the beneficiary who can then decide what to do with it. They might sell it, spend it or destroy it. On the other hand, if you put that gift into a Trust, it is handed over to one or more Trustees. These people will manage the asset on behalf of the beneficiary. This gives you more control, even after your death, as you can leave instructions with the Trustees. These instructions dictate how and when your beneficiary should receive their inheritance.
Trusts are particularly useful if any of your loved ones cannot manage their own finances, perhaps because they are children, are disabled or have addiction issues. When used correctly, Trusts can also have financial benefits, helping you to reduce tax liabilities and care home costs.
Legal advice for Trusts
Specialist advice should always be sought as Trusts come with tax consequences and annual legal and accountancy running costs.
Our solicitors have plenty of experience in advising on whether you need a Trust. We offer a comprehensive service and can also draft the Trust Deed, advise on the selection of Trustees, and inform you about the tax consequences for income tax, capital gains tax and inheritance tax.
Lifetime Trusts are considered to be so complex that it is a criminal offence for a person who is not licensed under the authority of an approved regulator to draft a Trust document. We are authorised by the Solicitor’s Regulation Authority to conduct this type of work.