Protecting Your Wealth: Trusts & Estate Planning

 

It is the most natural desire in the world – to pass on your hard-earned assets to your family and loved ones.

But before that is possible, there are unexpected complications, legal costs, delays, tax authorities, potential future relationships, former in-laws, creditors and local authorities eyeing up your assets.

We now have far more assets than ever before and at the same time, families have become increasingly diverse and complicated.  The threats to passing assets down to our chosen beneficiaries have increased dramatically.
100 years ago divorce and remarriage was rare.

This combination of increased personal assets, together with the new threats of modern society, means that estate planning should be a vital part of your financial planning toolkit.

Simply having a basic Will is no longer enough, as it is not likely to achieve your wishes.

Trusts are not new. They have been used for over 600 years to protect and preserve family wealth within traditional estate planning structures.  They are no longer just the preserve of the wealthy – Trusts are now available for everyone wanting to protect and preserve their assets for their loved ones.
There are two main types: –

Will Trust

Will Trusts are only set up on death.  During your lifetime you retain assets in your own personal name.  Most modern Wills have Trusts in them. The most common types used are:

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Protective Property Trust:
Protects your home from sideways disinheritance.  Sideways disinheritance can happen after first death, if the survivor remarries, lives with a new partner, owns assets jointly, has no Will, or has the wrong will.
Your children could be disinherited.

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Children’s Trust:
To protect children’s inheritance whilst still allowing access to funds.

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Inheritance Tax Planning Trusts:
To mitigate Inheritance Tax for unmarried couple or business owners.

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Disabled Beneficiaries Trust:
To protect means-tested benefits, but still allow access to funds.

Family Trust

A Family Trust is set up now and assets are transferred into it, although you retain control and access.
It is used to protect your wealth from a number of threats and what-ifs.
The principal benefits include:

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Avoiding the cost (average around £7,500 plus VAT) and delay (9-12 months) of probate.

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Protection against sideways disinheritance after first death
For example, survivor remarrying / new partner and your loved ones being partially or completely disinherited.

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Protection in the event of the early death, or divorce of a beneficiary, avoiding possible dilution of loved ones’ inheritance.

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Protection against financial hardship or the insolvency of a beneficiary.

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Avoidance of Inheritance Tax in beneficiaries’ estates.

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Protection against an excluded or unreliable beneficiary.

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Protection from creditors / means-tested benefits.

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Achieving maximum protection with complete flexibility.

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A long-term (up to 125 years) financial planning tool for the next 4 or 5 generations.

Find out more about Wealth Preservation

 

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