Will Trusts – should you consider one?
The evolving nature of modern day life means more and more people are now choosing to include a trust in their Will.
This is due to a number of factors including an increasingly affluent older generation and a sharp rise in the number of second marriages with, as a result, more complicated family structures.
The key benefit of including a trust in a Will is that it offers asset protection for those you leave behind.
What protection can a Will Trust give?
Making a Will - and potentially incorporating a trust - is an essential means of protecting your assets for those you leave behind.
This can become more complex when you have married more than once, and need to provide for a new spouse, as well as preserving assets for any children from a first marriage.
In another scenario, you may only have married once but have built up a sizeable inheritance that you do not want to leave solely to your surviving spouse or outright to any children.
In these, and a number of other instances, setting up a Trust can help. It enables you to ensure your loved ones are provided for and you may be able to not only minimise your liability for inheritance tax but to maximise tax relief too.
Through a Will Trust you can:
- Safeguard your inheritance - for example, make sure any inheritance you wish to leave your family is protected if your spouse remarries after you die;
- Protect your estate against future care home fees;
- Reduce your exposure to certain taxes;
- Provide for vulnerable or disabled family members so that their needs are looked after, even when you aren't around to help them anymore;
- Help children or grandchildren - you may wish to help children onto the property ladder or give money to grandchildren who are too young to look after it at the time, for example, to fund their education;
- Control a gift - give someone money but ensure you have a say in how it is used and invested;
- Keep any personal injury compensation separate, for example after a car accident, so it doesn't affect certain state benefits.
What types of trust are there?
There are a number of different types of trust but this is a complex area of the law and taking specialist advice is important to ensure that any trusts are set up and managed properly.
This can, for example, be used to provide a surviving spouse with the right to an income and enjoyment of assets until their death at which point any children share the remainder of the estate.
Assets are distributed at the trustees discretion, for example deciding when any young children are old enough to benefit. Click here to see what else we have written about this.
Vulnerable Persons Trust
This is specifically designed to protect a vulnerable beneficiary (mainly someone with a disability).
Please contact Wards Solicitors' Partner and specialist trusts adviser, Mary Harty, for more help and information.