"A trust is a legal arrangement whereby trustees manage assets on behalf of beneficiaries, and can be useful in minimising tax, protecting assets and providing flexibility in the succession of assets. "
Wills and Trusts are a suitable manner to govern the succession
The setting up of a trust is often the most suitable manner to govern the succession of assets or to reduce tax liabilities or third party claims against assets.
What is a Trust?
A trust is a way of managing assets such as property, shares and investments for certain people and can take on many different types. The people responsible for managing the assets are called the trustees and the people who benefit from the assets are called the beneficiaries. A trust is created via a trust document which contains certain rules and conditions with which the trustees and beneficiaries must comply. The trust can last for a maximum of 125 years under law.
Why make a Trust with I Will Solicitors?
There are various reasons as to why trusts are set up, but the two main reasons are asset protection and tax savings.
You may wish to gift a home to your child or children but fear that it may be lost by the financial imprudence of the child, or by factors beyond your control such as a claim made by a spouse on the divorce of the child. Trusts can also be used to ensure that assets are protected against the claims of third parties. In addition, you can appoint yourself and/or your spouse as trustee(s) of the trust fund in order to retain control over the asset.
Trusts can be created as part of a lifetime planning strategy, or on death through what are known as Will Trusts. This lessens your own wealth and thus reduces your exposure to inheritance tax. Additionally, placing assets into a trust can be advantageous for income tax purposes, as individual beneficiaries’ annual income tax-free allowances may be utilised for the reduction or elimination of income tax on rental income, for instance.
In either case, we can explain to you exactly which type of trust is most suitable for your needs and what the benefits of using such trusts are. We have experience in managing trusts and can either work with you regarding the management of the trust or effectively manage the trust on your instruction.
Once the assets are placed into trust, they are bound by the rules of the trust, which are detailed and complicated. Therefore, it is important that you obtain comprehensive advice before setting up a trust. There may be inheritance tax, income tax and capital gains tax implications, as well as tax returns to file on a yearly basis. We can set up the trust for you and, if you so wish, we will continue to manage the trusts accordingly.