TRUSTS AND ESTATE PLANNING

Invented in England during the 12th and 13th centuries, trusts are much more widely used than people realise and certainly aren’t reserved for just the very wealthy. The majority of our clients use them in some form.

We all want our hard earned wealth to pass to those we want and Wills help with this, Trusts however can provide more certainty and form a more comprehensive part of your Estate Planning.

Put simply, we think of our estates as being:

  • Our homes and/or other properties we own
  • Current & savings/deposit accounts
  • ISAs/Bonds and other investments
  • Shares
  • Business and agricultural assets
  • Personal belongings such as jewellery, cars, etc.

These can be handled by your will and also by the use of trusts. But there are other things which might pay out upon your demise such as:

  • death in service benefits
  • life insurances
  • pensions
  • other trusts

Things not necessarily considered in your planning can result in your wealth being lost, unintentionally shared or whittled away, such as:

  • tax
  • remarriage
  • a new partner/spouse and then their children
  • claims against your beneficiaries from third parties such as creditors, bankruptcy or local authorities/benefits agencies
Without any estate planning, whether you have a Will or not, any of the following could happen:

  1. Your estate is taxed on your death, again when your children die and perhaps again when your grandchildren die. Over just a few generations HMRC could be an unnecessary beneficiary of your estate.
  2. Your death in service benefits will pass to your partner/spouse tax-free but when they die your children could be sharing it with HMRC.
  3. After you die, your partner/spouse finds someone else. Your wealth might be lost to that new partner or his/her children – people you’ve never met.
  4. Vulnerable people, or those unable to look after themselves or their own affairs might not be properly catered for or perhaps have their existing provisions damaged
  5. Your assets could be taken by third parties meaning your beneficiaries could share their inheritance or perhaps even miss out altogether. This shouldn’t be the sole reason to use trusts, so please ensure you take and understand the advice given before proceeding, regardless of who you instruct.

We see these things happen regularly but, with proper planning and the use of trusts, so much can be avoided or managed. In many cases we work alongside financial advisers to help achieve your aims.

As well as providing control over timing and by how much someone can inherit, trusts can provide flexibility as to who might inherit. They can in certain circumstances also avoid the need for a Grant of Probate, thereby speeding up distribution of some of your estate and perhaps saving costs.

 

No obligation advice and a promise

Our promise is to let you decide at your own pace and treat your family like we would our own.