Trusts Our Service
As noted in the Wills sections of our website, we are able to include a wide range of Trusts within the Wills we draft. Trusts can be used to protect property from care home fees, divorce, bankruptcy and third-party creditor claims. On other occasions, Trusts might be used to save significant amounts of tax or to provide flexibility, so that a client’s Estate can be distributed as fairly and efficiently as possible. A general breakdown of the main types of Trust we offer is given below and each Trust has its own dedicated page, which goes into far more depth.
We are also able to draft Lifetime Freestanding Trusts, such as Home Protection Trusts, which are a type of Trust created during your lifetime and which help to protect your property from a range of third-party creditors and can also benefit you (and your beneficiaries) by avoiding the need for Probate on the property. We have a page dedicated to both Home Protection Trusts and Lifetime Discretionary Trusts and, if you’d like further information, just get in touch and we’ll send out one of our detailed brochures. We’re also always happy to help by phone or email.
Types of Trusts
- Property Protective Trusts: These are a type of Trust we set up within Wills that help to protect against care home fees and also to protect children in the event of the survivor in a relationship falling out with them or remarrying.
- Children’s Protective Trust: These Trusts allow carefully chosen Trustees to manage funds for the benefit of bereaved minors if you pass away leaving young children. They allow Trustees to spend money on the children for things like education, holidays, clothing and even their Wedding should they marry before the age of 25.
- Disabled Person’s Trusts: If you have a disabled or vulnerable child, then ensuring that your Will protects them to the greatest possible extent is vital. HMRC allows tax neutral Disabled Person’s Trusts to be set up, which mean that a disabled beneficiary is able to continue receiving care and support, without the local authority eating into their inheritance. It also means, in the case of beneficiary with a mental disability, that the Trustees can ensure that their inheritance is spent in their best interests and that they are not taken advantage of.
- Home Protection Trusts: This is a freestanding Trust, set up during the client’s lifetime, that is able to help protect against care home fees (which can amount to as much as £2,000 per week), avoid costly probate and save inheritance tax for children (and even protect their inheritance from divorce or bankruptcy)!.
- Asset Preservation Trusts: This is a type of Will Trust similar to a Property Protective Trust, except it tends to be the superior choice when liquid assets (cash, investments etc.) are passing into the Trust. The Trust also allows for some more flexibility, which can lead to significant tax savings when managed properly.
- Family Trusts: These are discretionary Will Trusts that allow a client’s Estate to go directly into Trusts. This provides flexibility, protects end beneficiaries from divorce/bankruptcy and can also save £100,000s of tax, as monies can remain in the Trust and cascade down the generations, saving IHT on children’s, grandchildren’s and even great grandchildren’s death (and beyond!).
- Lifetime Discretionary Trusts: These are a type of Trust that can be set up during a client’s lifetime in order to pass assets to chosen beneficiaries whilst retaining all control with the client. One of the main purposes of such a Trust is to save inheritance tax and £100,000s can be saved by doing this, all whilst keeping control with the client.
- Pilot Trusts: also known as Spousal Bypass Trusts, are a type of Trust that can be set up during a client’s lifetime and, when they pass away, a Death-in-Service, Life Insurance or Pension payment can be made directly into Trusts. This can save tax on second death and often saves as much as £130,000 of tax.
- Nil Rate Band Discretionary Trusts: These are a type of Trust that are frequently used by unmarried couples in order to save inheritance tax. They are sometimes also known as IHT Loan Trusts and are frequently used to save £130,000 or more in tax.