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Family wealth securityThere are many different types of trust to choose from. Each has its own particular characteristics, administration requirements and tax treatment so it is important to get specialist advice from a solicitor. The following examples are intended to highlight some common trust arrangements which we can establish for you. We can provide bespoke trusts to suit any individual requirements. The identity of your trustees is of particular importance wherever they have a discretionary power and professional trustees, such as a director of Stonegate, can provide impartiality in administering your trust.

Pilot trusts for death benefits (‘spousal bypass’)

When considering the value of your assets it is easy to forget to include the value of life insurance, death in service benefit and some pension death benefits. They are easy to forget as, during your lifetime, you do not receive any tangible benefit from them but they are often extremely valuable. These are two characteristics which can make death benefit payments very attractive for tax planning purposes and we often look at placing these in trust when dealing with our clients’ Wills.

Trusts for tax planning purposes

The flexibility and control which trusts afford make them particularly useful in tax planning arrangements. Whether as a loan trust, discounted gift trust, an outright gift into trust or the transfer of business and/or agricultural assets; trusts provide many tax planning solutions.

We can prepare bespoke trust deeds which allow you to designate assets as being held within trust and subject to your chosen requirements. This allows you to retain control of the assets concerned whilst at the same time divesting yourself of the benefit. This divesting of benefit is a key requirement for the commencement of the “seven year clock” for inheritance tax. Naturally that is an attractive feature where your beneficiaries are not ready, or able, to take possession of the funds you wish to remove from your estate, perhaps if they are minors, divorcing or in financial difficulty.

Trusts for vulnerable beneficiaries

Tax is not the only, nor indeed the original, reason for the use of trusts. Trusts are the traditional method of providing for beneficiaries who may not be capable of effectively managing their own property and affairs. They can be an effective method of

  • ring fencing for those in receipt of means tested benefits;
  • avoiding the costs and delay of a court appointed deputy for mentally incapacitated beneficiaries;
  • preserving assets for beneficiaries with addiction problems; and
  • protecting assets against the whim of spendthrift beneficiaries.