When planning your estate, you want to make sure the people you choose will inherit your assets according to your wishes, that you minimise inheritance tax losses and that your entire property isn’t lost to home care costs. Trusts can achieve your aims, but it’s important to select the right one for your particular needs and circumstances.  This is why our Estate Planning Service is invaluable, we will look at your personal circumstances and preferences and offer solutions that meet those needs.   The following are Will trusts that may be of interest to you;

​

Will Trusts

A will trust or ‘testamentary trust’ is only created upon death. You set up the trust as part of your Will in order to pass assets on to your family or loved ones.  There are different types of Will Trusts.

 

1. Discretionary Trust (or Accumulation Trust)

This trust gives the trustee the discretion to decide which of the Will’s beneficiaries to pass trust assets on to, how much they will receive and when they will receive it. This protects a beneficiary’s money if they are financially unstable for any reason and it means money does not have to pass to a beneficiary who has become wealthy.

 

Discretionary Will trusts are a popular way of inheritance tax planning. Reasons for this include the fact that assets which are 100% business or agricultural property avoid inheritance tax, and also that the inheritance tax bill is spread over time – it is payable at the outset and then only as and when money is distributed to the beneficiaries.

 

2. Property Trust

A property trust helps to protect property from being used to pay for long-term care fees. For this kind of trust to work, you and your partner or spouse must own the family home in joint names as tenants in common.  Each partner sets up a Will with each of you leaving your share of the property in the property trust. When one of you passes away, that share of the property passes into trust. Then if the survivor needs long-term care in the future, only their share is used by the local authority for a means-test when calculating contributory fees, because the other share is protected in the property trust. The protected share will eventually pass to the Will beneficiaries.

 

3. Life Interest Trust

A life interest trust allows you to specify who will have the rights to your property after you die. It’s very similar to a property trust in that it offers protection from home care fees. The main difference is that a life interest trust protects all your assets and not just your property. It also enables you to choose somebody to benefit from the trust whilst they are alive and at the same time to protect the underlying capital for other beneficiaries after their death.

 

4. Charitable Trust

This is a trust in which the beneficiary is also a charitable trust. Most large charities in this country are ‘charitable trusts’.   Setting up a charitable trust gives you the satisfaction that your assets will be used constructively and leaves a lasting memorial of your life. Charitable trusts are free of inheritance tax and Capital Gains Tax because they are for the public good.