Many people assume you must be rich in order to have a Trust in your Will. In reality, anyone can have a trust as long as they have assets to pass on to their beneficiaries. They are a powerful Estate Planning tool.
Here are some reasons Trusts work for everyone:
- If you want to pass on your assets to your children after you remarry.
- Under the rules of intestacy, your new partner gains priority over your children after you remarry.
- Previous Wills are voided after marriage, so your Will must be updated anyway.
- Unless your Will says otherwise, your new spouse will inherit the first £250,000 of your estate and the remaining will be split between them and your children, this means your children might not inherit anything, or very little after you pass. Your assets may also pass down your partners family meaning your kids could get nothing.
It is always important to update your Will after major life changes, however this isn’t always enough. There is no guarantee your assets will pass to your children this way. If you use a Trust, assets can be distributed to beneficiaries when you want, eg after your spouse has passed.
- If you own a business, your shares will automatically pass to your partner or children. This can however affect the running of the business as your family won’t have the correct experience. In this scenario, the best way to deal with it would be to bequest the shares into a Trust. So this means the surviving spouse will benefit from the shares but they won’t have any involvement in the running of the business.
- If you wish to lower your Inheritance tax bill, placing your assets into a Trust transfers the ownership from you to the trust, this means they are no longer part of your estate so won’t be subject to Inheritance tax. It is important to speak to an estate planner about doing this as it must be done properly. The government are always busy closing loopholes in the laws so MUST be done correctly.
- If you are worried about what will happen to your young children, a trust is a good way of providing for them before they are adults. Using a trust can control how much money they get and how much should go towards their living costs while they are living with their appointed guardian after your passing.
- The same steps can be taken to look after adult children. Examples of scenarios you could use this in are if you have a disabled child to pay for their care, or they potentially have an addiction/gambling problem.
- If you wish for your assets to be protected from divorce in the future of your family, eg if you don’t like/trust your Childs partner. Putting your assets in a trust can protect them from this.
If you want to find out more about any of the above, click the link below and fill out the form, so one of our team can get in contact with you and have a consultation completely free of charge.
“It’s never too early – but it’s often too late!!!”