Trusts Articles

Asset Protection Trusts (APTs) are a valid and effective tool for estate planners when used in the right circumstances. These trusts often come with higher fees, making them an attractive option for some to pursue higher profits without fully appreciating the risks and considerations involved in advising clients. A lack of understanding can lead to false or misleading claims

NRBDTs are simply discretionary trusts that take assets up to the value of the Nil Rate Band (NRB). The assets held in the trust are seen as owned by the trust and not by the trust’s beneficiaries and, therefore, are not part of the beneficiaries’ taxable estates.

Bereaved minors' and bereaved young person’s trusts are both very common. A will making a gift to children on the condition that they reach a certain age (depending on the age) will either create a bereaved minor’s trust or a bereaved young person’s trust (otherwise known as an 18-25 trust).

A Discretionary Trust is often used to protect beneficiaries from various risks, such as poor financial decisions, external influences, and, in certain cases, inheritance tax. This type of trust ensures that beneficiaries do not inherit assets directly from an estate. The assets are safeguarded because the beneficiaries do not legally own the trust fund assets. Trustees will only make distributions if they believe it is advisable and in line with the letter of wishes. This structure helps protect your legacy from third parties and prevents it from being squandered.

Business property relief can significantly reduce or eliminate inheritance tax on business assets. Many UK businesses could be eligible for up to 100% relief. However, this complex area of estate planning often necessitates additional professional advice.

Should it be done: Usually, no. Of course, it depends on the reasons and individual circumstances. Clients often tell us that either an advert on Facebook, usually with brightly coloured writing, or “Dave” down the pub said it is the best thing to do to avoid “well basically” everything from probate to care fees.

By including a right-to-reside clause/ trust in your will, you specify that you give someone the right to live/reside in one of your properties. You can specify within this clause if this arrangement is for a set time, such as for the rest of the person’s life.

Complex families often come with complex requirements to meet their long-term goals, and matters can be made more difficult when each testator has separate goals or concerns in mind. These goals usually revolve around the inheritance the children are to ultimately receive and when they receive it, and in certain cases, if they inherit at all. Using a Life Interest of the Residuary Estate can cater for most family needs for a number of reasons;

We should always consider Pets (the furry, scaly, feathered type). You may be pleased to know you can make provisions for them in your Will. Pets can be included in your will through an animal-purpose trust, which ensures their care and upkeep.

Where a client wants to provide for a beneficiary who is vulnerable/ disabled, they may want to leave assets in a vulnerable/ disabled person’s trust.

Property Protection Trusts (PPTs) are among the most common. They are typically used by couples to ensure that a share of the home will ultimately pass to children while still protecting the surviving spouse's interests.

I was talking with friends and the conversation came around to asking about trusts. So, even though this is oversimplified, I explained it like this.