Will Trusts
Will Trusts are a great asset when estate planning.
It is often thought that Trusts are only used by the rich and famous to avoid paying tax. But in reality, Trusts still form a very important part of protecting assets and tax planning for almost everyone.
In a Will, Trusts can be tailored to almost every individual scenario to suit the needs of you and your estate. The most common reasons for setting up a Trust is to protect assets when passing on to beneficiaries where:
- Children are not yet old enough to manage the assets themselves
- Beneficiaries are vulnerable or find themselves in vulnerable situations (for example if they have health complications or have marital or financial difficulties)
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Trusts, managed by carefully selected trustees, can provide that extra piece of mind in scenarios where the intended beneficiary might not be capable of taking control of assets all in one go.
Another scenario where Trusts should be considered in a Will is when looking at succession planning for a blended family. A Trust can be used as a strategic part of estate planning to ensure that your estate is safeguarded and distributed the way you would like after death.
However, Trusts can also be very beneficial when set up during your lifetime for a number of different reasons. Most often, these reasons are for:
- Later life planning – for example, planning in case you might need to consider how to fund future care needs or move into a care home
- Compensation award management – for example following personal injury or similar awards made following legal proceedings
- Inheritance Tax planning – the use of Trusts can help reduce or even eliminate inheritance tax, ensuring more of your wealth are passed to your loved ones and chosen beneficiaries
- School fee planning by grandparents – trusts can be an excellent way of allowing for grandparents to assist with meeting their grandchildren's school or tuition fees and, if structured correctly, this can also help the grandparents reduce their potential inheritance tax liability
- Managing assets through a charitable trust - It is not uncommon for wealthier clients to set up their own charitable Trust which can be managed by Trustees to contribute to the clients’ preferred charitable causes. As well as supporting good initiatives, there are various tax benefits to managing contributions in this way.
Trusts are an important tool in estate planning that should not be overlooked.
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Mullis & Peake have a specialist team in trusts ready to help you. Contact us online today or call us on 01708 784000.
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Our latest insights
Martyn is a consultant and specialises in contested Wills and personal injury.
Trudi is a Senior Associate at Mullis & Peake, with extensive experience in the Wills and Probate field.
