Trusts can be included in your Will where there is a need to put protection in place for your family and assets. The provision of a Trust in your Will can take into account members of your family who are young, vulnerable or disabled, ensuring that your inheritance is managed in the best interests of their welfare. This can have multiple advantages for the beneficiaries, helping them to move forward without having to worry about their inheritance being compromised.
Protecting your family home
Many of our clients come to us because they want to protect their family home in the event of their death. This isn’t limited to Inheritance Tax or the constantly rising costs of elderly care, but importantly it ensures that your share of the family home will definitely pass to who you choose, regardless of what happens to the other share(s) after your death, either through remarriage of the joint owner or financial difficulty.
Choosing a Trustee
A key component of a Trust Will is the identifying of one or more Trustees. Alternatively, we can appoint an experienced professional in case their expertise is required. This gives you complete peace of mind that your Will and any specific wishes are fulfilled the way you envisage.
Safeguard your business
If you’re the owner of a business and want its continued operation to financially support your family, a specific Trust within your Will can ensure that happens. After all, you put huge amounts of time, effort and skill into growing your business.
Different types of Trust Wills
There are a few types of Trust Wills, which include Property Trust Wills, Flexible Life Interest Trust Wills, Vulnerable Persons Trust Wills and Discretionary Trust Wills. To give you an idea of how each one works, you can find brief descriptions below. For further information, get in touch on 01482 380740 or book an appointment with one of our helpful advisors.
What is a Property Trust Will?
This kind of Will is also sometimes called a Property Protective Trust or a PPT. It is designed to protect your share of the value of a property that you own well into the future.
In order to qualify for a Property Trust Will, you need to own a property with someone else, whether married, unmarried or in a civil partnership. The purpose of a Property Trust Will is to guarantee that your share of the property passes to the right people if your partner were to remarry or create a new Will of their own after your death.
What is a Flexible Life Interest Trust Will?
A Flexible Life Interest Trust Will (FLIT) arises when a beneficiary is left a gift in relation to assets contained in an estate. This normally means that the beneficiary is entitled to receive income from the trust, for life, but they are not entitled to receive capital. The beneficiary with the interest is called the ‘Life Tenant’. The Life Tenant may also be identified as the ‘Principal Beneficiary’. After the Life Tenant’s death the assets in the trust will pass to other beneficiaries identified in the trust deed.
A Flexible Life Interest Trust provide the trustees with the power to pay trust income, and often trust capital to the Life Tenant. The trust may provide that the Life Tenant can live in a property owned by the trust rent free and include powers for the trustees to sell any such property and buy an alternative property for the Life Tenant to live in.
Where the life interest in the trust begins immediately after the death of the person creating the trust then it is called an Immediate Post-Death Interest in possession trust (IPDI).
A Flexible Life Interest Trust can provide legal protection for the Life Tenant against any other beneficiaries of the trust, and vice versa. A Statement of Wishes can also be used to inform your trustees as to how you wish the trust assets and income to be used and distributed).
This will benefit someone else after you pass away, usually your partner or spouse, whilst ensuring that your hard-earned cash and assets are protected for your chosen beneficiaries in the long run.
What are Discretionary Trust Wills and Vulnerable Persons Trust Wills?
Allowing you to appoint Trustees to manage inheritance on your behalf, a Discretionary Trust Will or a Vulnerable Persons Trust Will is for when you have loved ones who require support or additional protection in relation to their inheritance.
By setting out what your wishes are from the very start, you gain the reassurance that they will be fulfilled even if your beneficiaries are unable to manage the process by themselves. This could either be due to vulnerability or if it is not wise to pass directly to your chosen loved ones due to the fact that others could try to stake a claim to their inheritance, due to divorce or financial struggles.
Examples of a vulnerable person include someone who has a learning disability or physical incapacity, under the Mental Capacity Act, that prevents them from being able to fully look after their own affairs. Using this type of trust could also help those people who are vulnerable from losing their entitlement to state benefits which they need to ensure their continued quality of life.
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