Unravelling the Myths of Trusts
‘Living with a trust’ from the consultation with your expert adviser to the receipt of the assets held within the trust by your beneficiaries.
You will often hear people talking about the use of Trusts as part of their financial / estate planning as a means of protecting their assets for their families.
- How does a trust ensure that the assets are utilised for the chosen beneficiaries?
- Are you clear on the possible implications in relation to divorce and long-term care if Trustees (and Beneficiaries) disclose trust assets and information to third parties?
Does anyone really know what ‘Deprivation of Assets’ means, and how trusts can be utilised without breaking the Deprivation of Assets rules?
- It is the deliberate action to rid yourself of assets to avoid charges or reduce the amount you would have to contribute to your care costs
- Trusts are often used to ‘protect’ the estate
Working with experts who have many years’ experience in dealing with such Trusts can give you peace of mind. It is often knowing what not to do as much as knowing what to do. And the costs for setting up and managing a Trust? There are so many comments on the internet that focus on one aspect of a Trust or even one type of Trust without clearly identifying what the article relates to.
- Entrance and exit charges
- Anniversary charges
- Taxation (Income Tax, Capital Gains tax and Inheritance Tax)
If I gift a property to a trust, surely, I lose the Residence Nil rate Band (RNRB)?
Less experienced advisers would not know how to overcome this issue. In order to qualify for the RNRB of £175,000, the main residence must be bequeathed to children (more specific data is available on request). A main residence held within a Trust does not ordinarily qualify so potentially £350,000 of allowances are lost, at a cost of £140,000 in additional inheritance tax. Our expert advisers can draft a Trust so that the RNRB is not lost.
One of the most important decisions to make is that of the appointment of Trustees: family, friends or a Professional Trustee?
- Who do you want to ‘manage’ the trust on behalf of your beneficiaries?
- What do Trustees need to do to ensure that the wishes of the Settlor are followed?
- What do they need to be aware of when considering how best to achieve the aims in the Memorandum of Wishes?
- Do they know how best to anticipate and manage the needs of the beneficiaries across the lifetime of the Trust, which could be up to 125 years
What can go wrong if Trustees don’t understand their legal obligations?
The solution
There is no ‘One size fits all’.
The importance of the initial consultation is often under-stated. It is the point where our expert advisers learn about your estate, your pain-points, and your priorities. They talk you through the process without using jargon, keeping explanations simple and concise. They will make recommendations that help you to achieve your objectives in the most tax-efficient manner.
Our consultation comes with absolutely no cost to you and no obligation to follow our recommendations whatsoever. Our experts will be very clear of any costs for implementing their recommendations.
You will never be hurried into a decision. We are not sales people; instead you will find caring and compassionate advisers who will only ‘Do The Right Thing For Our Clients’.
You may meet us face to face in one of our many offices. If you have mobility issues or simple don’t want to travel, then we may meet at your home. Our service levels have been designed with our clients in mind.
Professional assistance from your local Wills, Trusts and Probate Solicitors
If you have any questions regarding a Wills, Trusts and Probate or would like to arrange a no obligation initial consultation, get in touch with our team of Wills, Trusts and Probate Solicitors today to discuss your needs.