A trust is a legal arrangement that can give you control over what happens to your financial assets when you die. Investigating trust options is an important consideration in estate planning.
Life Interest Trusts are very popular, for example, in second marriages, where your wish is to preserve the capital assets of your estate for the children of your first marriage, whilst providing a home and/or an income for your new partner.
A Discretionary Trust is often created to control the timing of an inheritance, for example, if your child is some way vulnerable both at the time of your death and beyond and can protect an inheritance against creditors. It can also be used to preserve inter-generational wealth.
A Nil-Rate Band Trust is a version of a Discretionary Trust used in estate planning to reduce liability to Inheritance tax on the death of a surviving joint owner, to ring fence assets against care home fees and to protect assets for your children should the surviving spouse remarry.
If a Vulnerable Person's Trust is set up, then your trustees manage money on their behalf, the person's benefits are protected and your trustees can claim special treatment for income tax and capital gains tax on behalf of the vulnerable person.
A Bereaved Minor's Trust can be created by parents for their own children or stepchildren until their child reaches 18. There are significant tax benefits to this type of trust.