Creating a Trust
When people hear the word ‘trust’, many think of a wealthy family with a pad in town and a place in the country. However, thanks to a steep rise in house prices over the past 20 years, and a general overall increase in prosperity, trusts are a way for anyone to protect their wealth for future generations.
Led by firm director, Samantha Edward , our commercially astute trust law Solicitors will advise you on whether a trust is the right solution for your needs and if so, the best type of trust to create. They will then take the time to carefully explain the legal effects of creating a trust, provide advice on choosing trustees, and meticulously draft a trust document.
Trusts can also be used to provide for vulnerable beneficiaries. EMG Solicitors’ Court of Protection team is a leader in this field of law. Samantha and her team work closely with the Court of Protection Solicitors to ensure vulnerable beneficiaries are fully protected through a family trust, should this be an option you wish to explore.
To speak to someone in our Wills, Trusts, and Probate team, please phone 0191 500 6989 to make an appointment.
What is a trust?
A trust is a formal transfer of money or property to individuals who act as trustees with instructions to hold and administer the assets for the benefit of named beneficiaries. It can be made in your lifetime and takes immediate effect, or it can be created on death, within your Will.
Creating a trust is very useful for tax planning because it can significantly reduce the inheritance tax burden payable upon your death. Trusts are also a wonderful vehicle for holding assets without losing control of them. Think of them as a box that you can put assets into – you can keep hold of the box so that you can continue to manage the contents, but you can also decide who takes what out of the box and when they take it.
What are the advantages of a trust?
Trusts are a useful way to:
- Hold assets on behalf of vulnerable beneficiaries whose benefits could be at risk, or who could be taken advantage of, if they own assets outright.
- Hold assets on behalf of minors who are too young to take possession of them straightaway.
- Give away assets that are worth significantly more than they were when you acquired them – without paying the capital gains tax that would otherwise be due upon the gift.
- Give assets away and have them removed from your estate for inheritance tax purposes without losing control of the assets given.
- Hold the proceeds of a compensation claim without losing access to means-tested benefits.
- Hold a property that you have been ordered to provide for an ex-spouse or child, without having to pay capital gains tax on that house when it is sold in the future. Further information on Property Protection Trusts can be found here.
This is just a sample of the uses that a trust can have. To find out if one might suit your circumstances, please contact us.