Asset Protection Trusts
Trusts can preserve assets, reduce taxes, control distribution of assets and keep assets within your family and can be either within a Will or standalone, ensuring your assets go where you want them to go.
Planning your estate can involve many different actions, from putting in place a basic Will, to setting up a lifetime trust. Modern families can have complicated dynamics and there is often a potential for conflict in the future if relationships break down.
There are potential problems which can stand in the way of your legacy reaching its intended recipient, including:
- Sideways disinheritance
- Issues affecting vulnerable beneficiaries
We can advise or help you with what might be important to you;
A Protective Property Trust
is a very popular trust that is written into your Will. Married couples may complete this to ensure on their death at least half of the property value goes to their children and not potentially a new spouse who remarries the surviving spouse. It basically ring fences half of the property value so on first death this half is protected. The surviving spouse is given a right to remain living in the property
A Discretionary Trust
can be either written into your Will or be stand alone. This trust is primarily used in cases whereby a “pot of money” is held by the Trustees for various potential beneficiaries. Along with a letter of wishes you would have written this will help guide your trustees as to who is to receive what and when.
A Lifetime Asset Trust
is a standalone trust which places a trust wrapper around your main residence. This trust does not mitigate against inheritance tax but will protect your main asset against third parties ensuring your main asset goes where you want it to go.
A Flexible Life Interest Trust
is also a trust written into a Will. This trust gives the flexibility to utilise allowances and work towards mitigating inheritance tax. The surviving spouse has full interest in the assets held in the trust of the first deceased’s estate and the objective of this trust is to ensure the surviving spouse is only taking what they need. So, on the death of both spouses the overall estate should fall below the inheritance tax allowances.
A Vulnerable Person Trust (disabled) & Addiction Trusts
are written into a Will. They are primarily discretionary trusts but with a particular person in mind. The named beneficiary during their lifetime is to receive at least half of the total trust fund if not it all. You would be asked to name substitute beneficiaries in the event of death of the vulnerable person or addict. These trusts are to ensure the vulnerable person or addict are protected and the trustees would control what they receive and when.