A trust can be used to help you – the Settlor - better manage your assets.
These types of legal arrangements are typically used to:
When you place your assets into a trust, they technically no longer belong to you, because you have transferred ownership to the Trustee. This means that their value usually won’t be counted when it comes to calculating the inheritance tax that is due on your estate.
Trusts can be incorporated into your will, either by yourself or by a specialist will writer. When setting up the trust, you need to make sure that you include information on the assets that you wish to be placed into the trust, who the Trustee and your beneficiaries are, and whether the trust will become active straightaway while you are still alive, or immediately after you pass away.
There are many different trusts available. They range from simple to complex, and each offers its own inheritance tax benefits.
Three of the most common arrangements requested by our private clients are:
These are the most straightforward of all. In the event of death, all assets within a basic trust will be passed on to the beneficiary with no delay, as long as they are over 18 years of age.
This type of trust enables a certain level of income to be distributed to immediate dependants (the ‘life tenants’) straightaway, whilst ensuring that other assets are protected and passed on to other beneficiaries (the ‘capital beneficiaries’) at a later date.
The Trustee of a discretionary trust has complete power over how the assets within the arrangement are distributed. The Trustee is also allowed to make investment decisions regarding the assets that are held within it.
To learn more about how setting up a trust could lead to better protection for your estate and incur substantial tax savings for your beneficiaries, contact Age Legal Services now. We’ll help you find a tax-efficient trust for your assets that suits your circumstances and your wishes.
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