Why make a Trust?

Why Make a Trust?
Throughout their history, trusts have been used to avoid or address problems in two main areas: taxation and family matters.

Taxation
In your lifetime you can create a trust into which you can place chosen assets which you no longer need yourself.  This reduces your own wealth and thus your exposure to inheritance tax subject to satisfying various conditions.

By creating a discretionary trust in your Will for the benefit of your spouse and children, you can take advantage of the nil rate band of inheritance tax and save literally thousands of pounds of tax.

You could settle assets in trust for your grandchildren in your lifetime or after your death.  Skipping a generation in this way reduces your children’s exposure to tax.

A charitable trust created in your lifetime or in your Will can receive unlimited assets, all of which can be free of virtually all forms of taxation.

Family Reasons
Trusts have been created in this country for almost 1000 years for the same family reasons then as now; here are a few

• When parents, grandparents and others are concerned that the children and grandchildren are at risk if they receive or inherit too much too soon.
• When you may fear that, by giving in your Will all your wealth to your spouse outright, it will be frittered away or left to a second spouse so that little or nothing will remain for your children to enjoy.
• When you might have an aged dependant – a widowed mother perhaps or retired housekeeper who would need continuing care should you die before her.
• When your son or daughter might risk bankruptcy or an unstable marriage or other relationship, be handicapped and in need of special care or for some other reason be incapable of managing their own financial affairs.
• When you might be fearful of losing mental capacity or that your possessions will be taken over by Government Agencies or even gold diggers!