Just what is a trust? Many people do not fully understand what a trust is. In fact, a trust is simply an agreement between the settlor (the person setting up the trust) and the trustees to look after assets on behalf of the named beneficiaries. Trusts first appeared in Homer’s Iliad and came to prominence during the days of the Crusades when the Courts of Chancery were formed.
Many people do not understand how a trust could complement the other estate planning documentation they may already have (such as a Will or Lasting Power of Attorney). The most common reasons you should consider setting up a trust are:
1) To protect a beneficiary from inheriting at a potentially inconvenient time, such as during a divorce or bankruptcy or whilst a beneficiary is living abroad.
2) To remove the need for probate: assets held within a trust are not normally subject to the time-consuming probate process and, as a result, there could be significant savings to be made against the new probate fees that are coming into force.
3) To avoid creating an inheritance tax burden for children or other chosen beneficiaries; the beneficiary can draw down from the trust fund as and when monies are required rather than just transferring the entire inheritance in one go.
4) To help to guard against a child or other relative making a claim under the Inheritance Act 1975.
5) To ensure family members are not disinherited against their wishes (for example if your spouse or partner remarries after you have passed away).
Aside from providing advice on the benefits of establishing a trust in your Will or during your lifetime, we are able to provide advice on the subject of whether life insurance or pension death benefit payments can (or should) be held in trust for the benefit of any spouse or children.
Providing bespoke and accurate advice on the subject of trusts is a specialised area of law. Hutchinson Legal & Associates Limited draws on the experience of a panel of solicitors well-versed in the preparation of trust deeds to ensure that both the advice and documentation are of the highest standard.