Setting up a trust can help you in keeping your estate out of the taxman’s clutches. It can ensure that the wealth you worked so hard for goes to the loved ones you leave behind — not HMRC.
How does a trust work?
A trust is essentially a legal document that gives ‘trustees’ legal responsibility to hold on to money, land, buildings, share portfolios, and other assets (such as valuable paintings, antiques, and jewellery) that are put in the trust.
As the person who settles the assets into the trust, you are referred to as the ‘settlor,’ and you can guide the trustees as to what should be done with the assets and how the trust is managed. You also have the power to decide who the ‘beneficiaries’ of the trust are.
Beneficiaries are people who receive some form of benefit from the assets held in the trust, usually in the form of income from properties and investments, or in the form of access to capital.
Why would I need to set up a trust?
There are many reasons to set up a trust, but most people (especially high net worth individuals) do it to safeguard family money from taxes. A trust can also protect wealth from other family members, ensuring the wealth is kept in the family line.
Are there different kinds of trusts?
Yes – the range is wide, and each type has its own benefits and pitfalls tax-wise. Trusts can be made to fulfil different goals and requirements. For example, you can design a trust to prevent younger members of the family from accessing wealth until you think they are ready to handle it. A trust can also be arranged to remove investments and property from your estate to minimise inheritance taxes. Be sure to consult an estate planning specialist to know more about your options, so you can make an informed decision.
Talk to an expert on Trusts to see what they can do for you, and how you can save your valuable assets. MVL Wills and Trusts can help you with professional advice and trusts to suit each client individually. Call Andrew Mathias on 01424 577070 or email andrew@mvlwillsandtrusts.co.uk for a free consultation.