You probably already know that setting up a trust protects your wealth from inheritance tax. However there are many other benefits to using trusts to pass on wealth. Here are some of them:
- retaining control of assets when passing them to adult children
- protecting assets, typically family wealth, for future generations
- protecting wealth: from the taxman, from legal challenges, from marriage breakdowns or children who may spend it too quickly!
- trusts can be used for tax-planning and can carry significant tax advantages
Did you know that trusts can be set up at various points during your lifetime? As well as making provision for someone, a trust can be set up to mark the marriage of a child or birth of a grandchild. You can also set up a trust as part of your Will.
One major benefit of a family trust is that the nominated trustee – the person who has control of the trust and its assets – can be placed under strict instructions through a legal document called the trust deed. This controls how, when and to whom the trust’s income is released. Trustees can be close friends, family or professionals.
Trusts for more than one child
Families don’t always set up individual trusts for separate children, but it can be done. Typically, a trust is created with a range of individuals, meaning that one child’s share can be held for others if circumstances change.
If a child loses their parents before they turn 18, a trust is created statutorily and they can access the money when they reach the age of 18. For this reason, having a trust as part of a Will created during an individual’s lifetime is a great idea as it means a degree of control will be retained even if parents’ wealth passes to young children or teenagers.
You’ve worked hard to earn your wealth and we think you should protect it.Talk to us about the best way to set up a family trust if you think it would be beneficial to you and your family.
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