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Creating a Trust
When considering what happens after you pass away, the desire to help and support loved ones financially will be high up on your list.
By setting up a Trust, you can create that peace of mind and certainty that you are providing for those closest to you when the time comes.
Creating a Trust, either during your lifetime or upon your death in a Will, and using the help and expertise of the team at Winns, is an important part of your future financial planning and shouldn’t be put off until tomorrow.
What is a Trust?
A Trust is a method of managing assets – these can be financial sums of money, investments, land or properties – on behalf of people. There are a variety of different types of Trusts which are usually taxed differently.
Involving a Settlor (the person who puts assets into the Trust), a Trustee (the person who manages it), and the Beneficiary(ies) (the person or people who receives the assets held in the Trust), it is a way to ensure chosen people receive what they’re entitled to in terms of inheritance from an estate following a death or from a lifetime Trust.
Why are they used?
Trusts are utilised for a number of reasons. Based on particular circumstances, they can be used to control and protect assets, keep hold of assets on behalf of someone who is too young to receive them, or keep assets secure if someone cannot handle them due to being incapacitated.
They can also be employed to pass on assets while a person is still alive, and when a person has passed. It may also be an option if someone dies without a Will.
Rebecca from the Wills and Probate team was fantastic…She made a complicated process very easy for everyone involved. Kind, thoughtful and professional.
Tim
When can a Trust be created?
A Trust can be created at any time in your life or written into a Will, and it is advised to use the services of a legal professional who specialises in this to help you do it. The team at Winns has decades of experience in setting up Trusts and will be able to support you through the process.
Our team will help you set out what assets are being considered, confirm who the trustees and beneficiary will be and when you wish the Trust to become active.
It’s important to note you’ll need to nominate at least two trustees, who you know and trust to handle matters, and who are happy to take on the role. It is also commonplace for Solicitors to work with Accountants when relevant in creating Trusts too.
Rebecca from Wills and Probate was the ultimate professional: polite, considerate and efficient when dealing with sensitive family issues.
Josie
What type of Trusts are available?
There are a number of different kinds of Trust, so it is important you choose the option that’s right for your circumstances. Here are some examples of common Trusts:
- Bare Trust – This is the most basic type of Trust, commonly used in Wills where assets are given to the named beneficiary as long as they achieve a specific age. For example often 18 years old or over. The assets are held in the name of Trustees, but the beneficiary receives the assets at any time after they turn 18.
- Interest in Possession Trust – The beneficiary receives access the Trust fund straight away in terms of receiving income / residence to a property but can’t control the assets that provide the said income (this money is subject to paying income tax on it).
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Discretionary Trust – This is a trust whereby the Trustees have total control over the assets and the income they generate, meaning they dictate how and when Beneficiaries receive from the trust. They could be following a letter of wishes left for them or some guiding principles. This is frequently used when children or grandchildren are the beneficiaries, with their parents being the trustees.
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Mixed Trust – This merges the principles of different trusts together, for example a beneficiary might have access to income from half of the trust (interest in possession trust) and the remainder be on bare trust.
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Trust for a Vulnerable Person – This applies if the beneficiary is classified as vulnerable in terms of the HMRC definitions, for example they could be an orphan or disabled, meaning they have more favourable tax benefits.
By discussing these with a legal professional, like those available in the Wills, Probate & Trusts department at Winn Solicitors, you will receive the relevant guidance and support required.
FAQs
Why is a Trust useful?
Using a Trust to help facilitate the passing on of assets to designated Beneficiaries provides that peace of mind and certainty that specific assets are going to the people you want to receive them. Especially when considering children or people under the age of 18, by holding assets in a Trust, it allows them to receive them when they turn an appropriate legal age.
Why should I use a legal expert to help?
With such variety in the types of Trust available, it is important you make the right choice for your circumstances. By contacting the Wills, Probate & Trusts team at Winns, they can discuss your situation, identify the specifics and provide guidance on what best suits your needs. You’ve also got that reassurance that the process is being handled by someone with experience, who will diligently ensure all aspects are covered.
How can I contact Winns?
The team at Winns are here to help with setting up a Trust. There are a number of ways you can contact us; by phone, or you can request a callback for a time to suit you. Alternatively, start a Live Chat on the website today.
Meet the Wills, Probate & Trusts Team
Rebecca Harbron Gray
Head of Wills, Probate & Trusts
For More Information
- Call Rebecca Harbron Gray and her team on 0800 915 2328.
- We offer home visits across the North East.
- Covid precautions and guidelines followed.