Inheritance tax is a staggering 40%.
It could cost your children a fortune just to remain living in your home.
Trusts can be used to protect your assets from the dreaded tax-man and ensure that your home and assets are passed on with minimum loss to your family.
Inheritance tax is a staggering 40%, which many people feel is unfair as during your life you will have already paid tax while earning this money.
So protecting your hard earned assets feels like the right thing to do when considering what you leave to your loved ones once you are no longer around.
Trusts are the ‘super-weapons’ when planning your estate.
This is especially important in London where the average house price in 2022 is £553,000. So just passing your house to your children means they will have to pay inheritance tax on £178,000 just to keep hold of your family home.
A house trust is where you allow anyone to occupy your share of the family home for as long as they want to or until they die, then on their death, your share passes to your chosen beneficiaries.
If the trust is correctly drafted, your house can be sold (should your surviving spouse or partner wish to move), in which case the trust can be transferred to the new property. You can also elect to end the life interest if your spouse or partner remarries or enters into a civil partnership or starts cohabiting with someone, at which point your share in the house would then pass to your chosen beneficiaries.
In order for the house trust to work, you will need to own your house as tenants in common. If you own the house as beneficial joint tenants we can arrange for you to “sever the joint tenancy”, so that you hold it as tenants in common. This will enable your share to pass to your beneficiaries.
Discretionary Trusts are usually set up to put assets aside for children and/or grandchildren for a future financial need or as a protective measure for a vulnerable family member who may be unable to manage their own finances.
A Living Trust is similar to a Will, in that you set out your wishes about your assets and your heirs. However, a Will only becomes effective when you die and after the probate process. A Living Trust, however is effective whilst you are still alive. You can place as many assets into a Living Trust as you like, such as property, savings and investments. The Trustees will take control of the assets immediately, which can be very beneficial to you and your family in certain circumstances.
How to protect your assets
1. Lets have a Quick Chat
2. Make a Will to Protect your Assets
3. Relax & Get on with Life.
Home visits are usually available during evenings and weekends to fit in with your schedule.
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A trust allows appointed trustees to manage money, property or other assets for the benefit of named or potential beneficiaries.
Common UK trusts include bare trusts, discretionary trusts, interest in possession trusts, accumulation trusts and trusts for vulnerable beneficiaries.
A lifetime trust starts during your life, while a will trust is created through your will and generally takes effect after your death.
A house can be placed in trust, but this may affect ownership, control, tax, mortgages and future use of the property.
A trust can allow trustees to manage a child’s inheritance and control when and how the assets are distributed.
A trust can provide managed financial support for a disabled or vulnerable person while protecting their longer-term interests.
Choose trustees who are trustworthy, capable of managing assets and willing to follow the trust’s terms and act for its beneficiaries.
Trustees must protect the assets, follow the trust document, act for the beneficiaries and meet relevant administrative and tax obligations.
Assets already held in a lifetime trust may avoid probate, but other estate assets could still require a grant before they can be administered.
A trust may have tax, registration and reporting obligations. The requirements depend on the trust type, assets and beneficiaries involved.
Trusts may form part of inheritance-tax planning for larger estates, but their suitability and tax treatment depend on the circumstances. Specialist advice is required.