Trusts
When we start talking about trusts many people do not believe they are for them. They believe only the very wealthy need trusts. This is simply not true. There are various types of trust and various ways of using them. If you own a house with your partner you probably would like to protect the property or a share of the property. You should have a discussion with us about including a trust in your Will.
The use of trusts can be broadly split in two categories, protection of assets and tax planning.
Property Protection Trusts
These are probably one of the commonly used trusts in Will planning.
The main reason this is used is to ensure that each owner can give a life interest of their share of the property to their partner/spouse in a Property Protection Trust. Whilst ultimately protecting that share for the children the partner/spouse can live in the home until they die and their share of the property passes according to their will.
The main benefits are;
If the survivor remarries they can only gift their share to their new spouse.
If they need residential care in the future only their share can be assessed.
Any capital released can be loaned to the life tenant.
Other common reasons for using trusts are to protect capital when leaving money to the children or other vulnerable people.
A Bereaved Minors Trust
This is very useful when providing for children under 18.
The beneficiaries (typically your children) are entitled to all the income arising from the trust or it can used to benefit the bereaved children.
The main benefits are;
Minor becomes absolutely entitled to the trust property on or before they reach 18.
Entitlement can be deferred until age 25.