Establishing a trust in your will can be a very valuable tool, as it can lessen IHT (Inheritance Tax) as well as ensure that your children aren’t disinherited by a change in your marital status (such as getting a divorce or remarried). In addition, a Property Protection Trust can help shield your assets from any care fee payments. However, trusts can be a very complex addition to your will, and you could be left wondering exactly what a trust is, and why you need one immediately.Trusts can be written in two ways, to either take effect while you’re still alive or upon your death. A simple trust can be a clause within a will that protects your assets until a child comes to a certain age, or can be a complex way to care for a child with special needs who cannot manage their own affairs.
Lifetime Interest Trust
If you’re thinking of looking into trusts in Ipswich then you really need to be aware of two different kinds. The Lifetime Interest Trust (also known as the Family Asset Protection Trust) essentially gives ownership of certain assets to a trust. You control this trust, and can benefit from it while you’re still alive, such as receiving interest or dividend payments. You can still buy or sell assets as well.However, this trust makes it so that if you should die, your partner can still benefit from your assets, such as continuing to live in the home. When they die, the trust (and your assets) passes on to your beneficiaries, like your children or other people named in your will.
A discretionary trust is particularly useful for couples who are unmarried, and therefore cannot benefit from any inheritance tax upon one partner’s death. This type of trust has assets to include property, which can be transferred upon the person’s death to be managed by trustees. Trustees in this case could be the surviving partner or any named beneficiary, and those trustees can decide how to use and distribute those assets.
This type of trust saves you thousands of pounds, even though you still need to pay the inheritance tax on the first partner’s half of the assets, all in a perfectly legal way. Discretionary trusts can also be used for sideways disinheritance, as well as provide for a family member with a certain disability.Trusts can be very complex, but they don’t have to be a headache for you. Instead, consider employing the services of a will-writer who can write up the proper trust for your situation. If you’ve got a family that needs to be protected or assets that would need to be distributed upon your death, it’s important that you don’t put this off. You can benefit from a Lifetime Interest Trust every single day, or put a Discretionary Trust into place in the event of your death, protecting yourself and your loved ones.