York A Will is one of the most important documents you will ever sign. It is your opportunity to decide who you would like your assets to go to following your death.
The use of trusts in Wills, to help protect assets, is becoming more prevalent. There is a common misapprehension that trusts are only used to avoid tax or by the wealthy. This is simply not true. Used in the right situation a trust in a Will can be a vital estate planning tool. This article is not an exhaustive list but provides some examples of situations where the use of a trust might be beneficial.
Supporting Vulnerable Beneficiaries
You might want to leave assets to beneficiaries who are vulnerable because of age, disability, instability in their lives, or an inability to deal with inheriting a large sum of money. A discretionary trust (or disabled persons trust) is a way of doing this. No beneficiary has an automatic right to receive funds from the trust. Instead the Trustees have flexibility to decide in what situations funds are given out, who they are given to and the amounts.
Care Fees
If there is any possibility a surviving spouse or partner will require residential care, careful planning can ensure they are provided for by a trust in a way that also protects your assets. Generally, assets within a trust are not taken into account in the financial assessment carried out by your local authority. However, this requires careful planning. The type of trust used is important and care is required to ensure there is no deliberate deprivation of assets.
Blended Families
Blended families are increasingly common. A balance is needed between providing for a new spouse or partner whilst protecting the inheritance of children from a previous relationship. A trust can be used to provide for the new partner (for example allowing them to live in the family home for the rest of their life). On death the assets in trust can pass to the children from a previous relationship, thereby helping to protect them from being disinherited.
Complex or High Value Estates
It might be that your estate is complex or high value and because of this you anticipate tension or disputes. The estate might benefit by taking into account the tax landscape on your death before any funds are distributed. A discretionary trust gives your Trustees the flexibility to do this and try and manage any disputes, or take advice on mitigating tax.
How we can help
Of course, setting up a trust in a Will can be complicated. Legal advice is critical to ensure full comprehension of the advantages and disadvantages, and whether your situation is right for a trust. At Ware and Kay we can provide this advice.
To get more information on protecting your assets using trusts in Wills you can speak to our specialist Wills & Probate Solicitors on York 01904 716000, Wetherby 01937 583210 or Malton 01653 692247 or email law@warekay.co.uk.
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