Legal

What Is a Trust and Why You Should Set One Up?

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There are various types of Trusts that can be incorporated into your will that can help achieve specific objectives such as as a discretionary trust or life interest trust.

Types of Trusts

If your will creates a Trust then, once your executors have carried out the terms of your will, the Trustees will go on to manage the assets left in the Trust on behalf of the beneficiaries.

There may be circumstances where you would prefer that your estate doesn’t go directly to your beneficiaries but rather that it is held on behalf of your nominated beneficiaries in a particular way.

How to protect your assets for future generations and peace of mind

Trusts are a great way to reduce, and in some cases eliminate, hefty estate taxes. Essentially, by transferring assets into Trusts you can reduce your overall taxable estate. Though there are various types of Trusts to choose from, they almost all take tax planning into account and are created for various reasons, including the following:

  • To control, protect and preserve family assets for future generations
  • To provide for those who are financially unstable or vulnerable
  • To assist with tax planning
  • To cater for complex family situations, for example, if you have divorced and remarried and have adult children from previous relationships. In this case it may be sensible for you and your spouse to consider incorporating life interest trusts into your will in favour of each other. This will ensure that you have provided for your spouse during their lifetime, but also ensures that ultimately your half of what you brought to the relationship goes to your own children
  • To help with care fees planning by preserving your share of the family home from being used to pay your surviving spouse’s care fees

Should you obtain expert advice on setting up a trust?

Trusts are a complex subject and the timing, wording and other circumstances can be very important when setting up a will trust. We strongly advise working with an expert solicitor when setting one up.

Why not speak to estate law experts Slater and Gordon? As the UK's leading consumer law firm, and our trusted legal partner, they are committed to delivering exceptional and affordable legal services and can help and advise. Book your 30 minute free consultation today.

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