Wills, Estates & Trusts

Trusts

What is a Trust?

A trust is a legal arrangement whereby the legal owners of property (the trustees) hold that property for the benefit of specified individuals (the beneficiaries). Trusts can be used by you to give away your property, money and shares in a controlled way to your beneficiaries. They can be set up during your lifetime or in a Will which comes into effect on your death. The assets are controlled by the trustees who have an obligation to manage the assets for the benefit of the beneficiaries.

Common uses of Trusts in Wills

Leaving assets to young children

Assets (the trust fund) are managed by the trustees until a child or children reach a specified age when they are entitled to receive the trust fund. During the interim period the Will provides that the trust fund be made available for the benefit of the children on a controlled basis.
For example, if a couple died and left children the assets could be placed in trust until the children reached 21 but the guardians would be able to access some of the funds if needed to ensure a comfortable upbringing for the children. In this way the trustees retain control of the assets and can ensure that they are used only for the benefit of the children.

These types of trusts are also popular with grandparents wanting to leave assets to young grandchildren.

Second Marriages

An increasingly common area of trusts in Wills is where someone has remarried but has children from a first marriage. When the first partner dies (the testator) the surviving spouse receives a ‘life interest’ in the marital home, meaning that he or she can live in it rent free until they die or remarry. On the surviving spouse’s death the house passes to the children of the testator. In this way the ultimate destination of the property is determined by the testator whilst still letting their spouse retain the benefit during their lifetime.

Minimising Inheritance Tax liability

A nil rate band discretionary trust can be set up to help minimise the amount of Inheritance tax payable out of an estate.
Please click on the Inheritance Tax link for more information.

Trusts have many more applications than the ones listed above and Graysons solicitors can offer specialist advice in order to decide which type may be appropriate to your personal circumstances and also to explain any possible tax implications. Please contact us for a FREE no obligation consultation where we will be happy to discuss your particular needs.