What is a Trust?
A trust is a way of getting an asset or assets from one party to another, often with a set of guidelines to the trustees (those who control the trust) on how the assets within the trust should be used and when and how the ultimate beneficiaries receive those assets.
We use trusts to achieve our clients’ objectives in many different ways.
For example a couple may have £300K to leave equally to their 2 children. Their youngest is level headed however his elder brother has drink and gambling addiction problems he is trying to overcome.
The problem here would be that whilst our clients have no issue leaving £150K to their youngest son, they are concerned about the effects on their eldest son of having £150K and the temptations that may bring.
A simple Will would give both both sons £150K each; by instructing us to create a trust we could arrange that on the death of the clients, the eldest’s inheritance will go into a trust (controlled perhaps by some or all of either family members, friends or a professional trustee. Their role will be to use their discretion in advancing parts of the trust fund to the eldest son perhaps as an income rather than in lump sums and could choose to pay it towards his mortgage company or landlord rather than straight into his account.
Others for example may want to leave money to their 3 children of which one is disabled and in these cases the parents are naturally concerned for their disabled child’s welfare when they are gone – a trust could receive all monies to be used to ensure that the disabled child receives the financial support they require with the rest of the money going to the benefit of the two other children – often the trustees are instructed to invest the assets to provide an ongoing income rather than distribute lump sums but they can use their discretion as to how best use the funds – this enables them to perhaps buy disability equipment where necessary.
These are just a couple of examples – there are lots of ways we can use trusts to ensure those closest to you are supported in the way you want – they can even be used to avoid a successful claim on your estate from someone you have excluded who may expect to inherit.
To find out more please discuss with us though part of our duty to you is to find out what you would like to happen in the event of your death and then ensure we advise you on the most appropriate estate plan which may or may not include trusts.