Last Updated on Mar 11, 2020 by James W
If you are thinking about the best way to protect your wealth and keep it safe for your children in the future, then it may be worth considering putting it into a trust.
A trust is a legal arrangement in which you can give cash, property or investments to someone else who then looks after them for the benefit of a third person. For example you can put savings aside in a trust for your children. If you put money into a trust then you no longer own it, which makes it an attractive option for people looking to cut their inheritance tax bill when they pass away. However if you’re looking to open a trust to do this then it’s important that you take good legal advice. Professionals like Willclaim Solicitors can help you do this the right way.
Types of Trust
There are all kinds of trusts available for you to take advantage of. Some of them can be written into your will, while others you could set up today. A bare trust is the simplest kind of trust, giving everything to the beneficiary immediately provided they are over 18. Alternatively an interest in possession trust enables the beneficiary to take income from the trust immediately, but does not give them rights to the cash, property or investments that generate it.
This trust is a good option if you want to pass on the investments in the trust to your children when you and your partner die. Another option is a discretionary trust which gives the trustees the power to decide how its assets are distributed, making it a wise choice for example if you are looking to leave some of your wealth to your grandchildren but want to leave it to their parents to decide how.
When you set up a trust you must make some points clear. You must establish when the trust becomes active, whether it is immediately or when you die. You must state who the trustee and beneficiaries are as well as the assets of the trust. When setting up a trust some people name the executor of the will as the trustee, but you may choose someone else. Trust law is predictably rather complicated but with the right legal advice you can set one up that will help you look after your livelihood and keep your family secure.