When to start a Trust
It is often assumed a Trust is used only for very wealthy people. However, this is not correct.
A trust is used for a variety of circumstances and can be created in your lifetime or by your Will when you pass away.
The following are circumstances that would indicate that you could benefit from a trust:
1. You have a vulnerable beneficiary
Examples of this could be that your child has a disability and receives means tested benefits or you have a child that is not responsible with money perhaps because they have drug or alcohol dependency
2. You are worried about your children getting divorced in the future or becoming bankrupt
Trusts can assist in preventing inheritance passing directly to your child and therefore safeguarding such monies becoming part of any future divorce settlement or passing to trustees in bankruptcy
3. You have a business
Trusts can be utilised to preserve business property relief on death or in your lifetime. In addition, shares can become alphabetical shares, placing them into a trust and income derived from those shares to help fund school fees or other things for loved ones
4. Protection of property against care home fees
On death we can place your share of a property into a certain type of trust so that if the survivor needed to go into a care home, only 50% of the property could be used to fund such care. It is a way to protect 50% of the property against care home fees.
5. Protect children’s inheritance where you have children from a previous marriage
On death, and if you pass the bulk of your estate to your current partner, the partner could make a new Will and disinherit your children from your previous relationship. Trusts can be used to still benefit your current Partner but also safeguard against that scenario ensuring that your children’s inheritance is protected.
6. Preservation of wealth for future generations
Where an individual has substantial wealth it may be unwise for this to pass directly to beneficiaries. Trusts can be used to look after the money which should then still benefit loved ones but preserve the funds for future generations.
Please do not hesitate to get in touch with Welland Valley Legal to discuss if a trust is appropriate for your circumstances.
To learn about what trusts you may wish to consider putting in your Will, please see our Trust page
The following are circumstances that would indicate that you could benefit from a trust:
You have a vulnerable beneficiary
Protection of property against care home fees.
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