Matrimonial Issues.
The inheritance would not be taken into assessment in any divorce.
A Trust is a way of looking after and managing your assets whilst you are alive or after your death. Trusts can protect your children's inheritance if they divorce. They can be used to protect vulnerable beneficiaries if they have addictions or illnesses and can protect the benefits of a vulnerable individual so they do not lose them upon inheriting. In some cases, Trusts can be used to reduce Intergenerational Inheritance tax implications.
Probate is required on all assets over £50,000 and even with a Will probate can take on average 18 months to complete properly. During this period assets are generally frozen, therefore if your home is part of the estate, it could be delayed if it needs to be sold.
In certain Trusts, if the home is within the Trust, the asset is no longer considered in your estate and it will no longer be considered towards your Probate costs. In addition, there is no need to move your home into the management of your Executors as your Trustees will already be able to manage this for you.This could save months of time and potentially thousands of pounds.
If you lose mental capacity, assets held within the Trust can be managed by your Trustees. They can use any income from the Trust to help the trusts beneficiaries and to improve their quality of life. Assets and decisions that fall outside of the Trust will be managed by your Attorneys using your Lasting Powers of Attorney. They work together.
Sometimes it is not wise to leave a lump sum to a child. If a child inherits through a Trust, that inheritance is protected against:
The inheritance would not be taken into assessment in any divorce.
Creditors cannot lay a claim against the inheritance.
Inheritance not taken into account for assessment.
Sometimes a child needs to be protected for their own good.
Although it is difficult to disinherit children through a Will in Scotland, having your assets in Trust avoids this issue.
Many families are devastated when Inheritances are given to family members who are poor with money and the result is that the inheritance goes to an Insolvency service to pay creditors. The trustees can ensure that money is only passed on when appropriate to do so or the beneficiary can be drip fed money so as not to squander it.
Some beneficiaries are dependent on state benefits either due to bad luck, bad judgment or illness. As the trust owns the money, in law, this money cannot be included in any means testing against benefits. The money can be passed to the beneficiary as and when required which is particularly important when the beneficiary has a condition that is unlikely to improve.
Assets held in some trusts will not form part of the future taxable income of your beneficiaries. Therefore, this money can pass through your bloodline, exempt of any future Inheritance Tax liabilities. This could ultimately save your grandchildren, tens if not hundreds of thousands of pounds in the future.
Imagine working your life, leaving your assets to your children and then they divorce. If the asset is in their name, it is likely to be included in any financial settlement in a divorce or when splitting from a long-term relationship. Certain trusts can protect this money, meaning that the asset never forms part of this financial settlement.
Some beneficiaries may have financial difficulties, others reliant on drugs, alcohol or even gambling addictions. A trust can protect this money for them. Delaying when they are paid or even drip feeding the money, or paying for essentials like rent and food, without the individual having the responsibility to hold the money themselves.
"Very friendly and the advisor explained everything in detail so i could understand all forms. he was very patient and helped when i was having problems, the ladies from the office kept in touch throughout, thanks to you all."
Valerie H - Rotherham, South Yorkshire
The Wills and Probate team at Centurion EPG provide expert guidance. Whether you are looking to write your Will for the first time or wish to update your existing Will, we understand how difficult this time can be and our estate planning team are here to put you at ease.
When you die, your estate is distributed immediately – no need for probate.
Your children can use the trust to protect their own assets and help reduce inheritance tax.
The Will instructions are carried out by Trustees (professional solicitor) acting only in the interest of your wishes.
Provide assistance to beneficiaries while your still alive If the Settlor wishes, the Trustees do not have to wait for the Settlor to die to provide assistance to the beneficiaries. They can see their beneficiaries benefit during their lifetime.
Sideways disinheritance is a common occurrence in the event that one of you were to remarry the inheritance would be protected from moving sideways to a new spouse as with second marriages it is possible that inheritance can be passed to another family. This can be avoided with the Asset Protection Trust, as you are in control and can specify who will inherit.
Call us free on 0333 335 5472 or fill in the form below and one of our Estate Planning Experts will be in touch.