Trusts and Estate Planning
TRUSTS
Trusts can always sound like a confusing topic or something that people believe is only relevant to those who have large estates. However, there are many reasons why a Trust in a Will might be important and very useful.
The most common trusts in a Will are :
1. PROPERTY PROTECTION TRUST (“A PPT”)
If you own a Property with another person, you will either own your Property as “joint tenants” or “tenants in common”. If you are joint tenants you, together, own the Property and on death, regardless of the terms of your Will, the other party automatically inherits the whole Property. If you own as tenants in common, each of you owns a distinct share of the Property and can gift your share in your own Will. We can talk to you about how to convert your ownership (if you are not already tenants in common) and set up a Trust in the Will to protect your share of your Property, preserve your Residential Nil Rate Band tax exemption and ensure that future events do not cause a disinheritance of any of your children.
2. FLEXIBLE LIFE INTEREST TRUST
This is similar to a PPT but involves all of your estate (and can include the Property or not). It provides that your assets are put into Trust on your death, with ongoing Trustees managing those assets to provide an income for those who will benefit from that Trust. It is discretionary in nature and allows the Trustees to make decisions about when and how income and capital are directed throughout the lifetime of that Trust. The Trust will provide a right of income for a spouse/civil partner and protect the assets from third parties.
3. VULNERABLE/DISABLED PERSONS TRUST
Sometimes it is necessary to set up a Trust to cater for those with more needs than others. Like a FLIT, it is discretionary in nature and works in a similar way. Again, if this is something you might need, we can discuss in more detail.
