The easiest way to think of a trust is like a safe. Within the safe are the instructions for administering the Trust. There are several trusts available within a will.
For the majority of people, the most valuable asset they own is their home.
For many modern relationships, there is a concern that should one of you die and the remaining partner meet somebody new, who would that inheritance go to. Alternatively, how do you go about leaving your part of any inheritance to children from a previous relationship?
A Property Protection Trust can address all of these issues. It allows the surviving spouse to remain in the property whilst ensuring that the children’s share is then allocated correctly when the time comes.
For elderly people this type of Trust can be useful in protecting property from long term residential care home fees.
This trust is useful for those who are not only house rich but cash rich also. It enables not only your property but also your money to be placed in a trust. As above, it allows your spouse to remain in the property but also means they can use the income from the capital invested.
This type of trust can again be useful to those concerned with losing their wealth to long term care fees.
This trust is generally used to ensure that assets stay within the family and prevents them from being inherited by unintended third parties.
This trust effectively means your beneficiaries inherit more than they would do by reducing or eliminating thousands of pounds in administering your estate.
Your beneficiaries also inherit immediately rather then waiting for your estate to be administered.
This Trust can prevent money/assets being used to fund long term care fees.
Whilst everybody starts with a tax free allowance which can be left to whoever we choose (currently £325,000) anything above that amount is taxed at 40%.
People are often surprised that they are over this Nil Rate Band Allowance when they add up their previous gifts and assets to include property, savings, investments, life assurance policies and so on.
Whilst it is illegal to avoid paying Inheritance Tax there is a legal solution to reducing your Inheritance Tax liability for your beneficiaries.
Storrs Estate Planning Consultants are able to help you assess your worth, calculate the amount of Inheritance Tax which would be due and discuss strategies for reducing your exposure to Inheritance Tax.
Spousal Bypass Trusts are not limited to death-in-service benefits. They can be used in conjunction with the
various lump sum death benefits payable from a pension scheme and any form of life insurance. Therefore,
most people with these arrangements should consider placing the benefit of these policies into such a trust.
The surviving spouse or partner can be a trustee and therefore ‘control’ how the funds are used, whilst at the
same timing having access and achieving considerable savings in Inheritance Tax.
Whilst a discretionary trust, or any type of trust for that matter, has its own taxation regime upon which advice is
required, in many cases it is certainly worth investigating this type of arrangement particularly if your estate,
including death benefits, is likely to exceed the IHT threshold.
The funds or property held in a Pilot Trust do not belong to any one beneficiary so they are not subject to inheritance tax when one of the beneficiaries dies. Funds may be loaned to beneficiaries during their lifetime thus reducing or avoiding future trust administration costs.
A pilot trust is set up during the lifetime of the client ready to receive funds and/or property upon their death from a legacy in their Will, pension fund or death-in-service benefit. Also known as bypass trusts they are normally discretionary and can be created by attaching a £10 note to the trust document. The trustees may be a professional organisation such as a trust corporation or up to four trusted individuals, one of whom may be a spouse or civil partner.