Drummond Miller’s team of Wills, Trusts, Tax and Probate Solicitors have years of experience in every aspect of Trusts. Our team are on hand to explain all the benefits of placing your estate into a Trust.
What are Trusts?
A trust is a legal way of holding money or property so that it can be kept safe and used exactly how you want it to be used, either during your lifetime or after your death. Trusts are tax-efficient and any assets contained in the trust are kept separate from your other assets and are not regarded as belonging to you when it comes to examining your financial circumstances for residential care home fees, for instance.
Settlors, Trustees and Beneficiaries
If you set up a trust, you are the ‘Settlor’ and you will need to appoint ‘Trustees’: your Trustees might be friends, or you can appoint professionals – for instance, Drummond Miller can act as your Trustee.
Your Trustees have the task of looking after the assets contained in your trust to make sure that your ‘beneficiaries’ will receive the most benefit from those assets. Your beneficiaries might be your spouse, children or grandchildren or they could be your business partners or employees - trusts can be used for a wide range of purposes.
Putting your beneficiaries first
A Trust can help you to pass more of your assets to your beneficiaries, rather than to the Inland Revenue or Local Authority. You can arrange a Trust that helps your beneficiaries while you are alive, or you can create a Trust as part of your Will that will help them after you have died.
For example, you may have young children and want to specify that you would like them to inherit from you only when they reach a certain age – they can legally inherit when they reach 18, but you might consider this too young and want to hold your estate in trust for them until they reach 21 or 25, for example.
Or you might have a grandchild whom you would like to help with university fees: you can set up a trust that will pay out for that particular purpose, whether or not you are alive at that time (and if they did not end up going to university, you could specify in the trust what you would like to happen to that money in those circumstances).
Perhaps you have a loved one who has special needs: if you simply left a lump sum of cash for them in your Will, they may be at risk of being exploited by unscrupulous people, or you may worry that they could not manage the money efficiently and be left unable to pay for essential care needs. Instead you could specify that your Trustees should ensure that those needs are met, and that any assets left over could be split between your other loved ones, for instance.
Trusts can be as flexible as you need them to be, as long as they are carefully drafted to avoid any uncertainty. This is why it is very important to arrange for specialists to draft your Trust Deed, unclear trusts can not only lead to tax liabilities, they can lead to a great deal of heartache and confusion for those left behind after you have died. We have a great deal of experience in drafting Trust documents and Wills and can guide you through all of your options. For example, you might want:
- a Discretionary Trust - your Trustees will ultimately decide which of your chosen beneficiaries will benefit from your trust and to what extent. For this type of trust to work well, you need trustees who understand your wishes well enough to be able to know what you would have wanted to happen to your trust.
- a Fixed Trust - you decide when you set up your Trust exactly which beneficiaries you want to benefit from the Trust and to what extent.
- a Trust that will protect your assets against potential threats such as divorce, bankruptcy or business insolvency or residential care home fees.
- Trusts for your business assets or pension funds to protect or reward your employees or partners.
How Drummond Miller can help
It is important that you understand all the options available to you when setting up a Trust. We will take the time to listen to what you hope to achieve from your Trust and to talk to you about your options. We have years of experience in drafting Wills and Trust Deeds, and in acting as or advising Trustees in handling Trusts efficiently. We will use our expertise to help you to plan effectively for your future and for the future of your beneficiaries.