What is a trust?
To start off with the technical stuff about a trust-
A trust is legal arrangement which enables a person, known as “the settlor” to transfer the ownership of property, cash or shares to another person known as “the trustee” to hold on behalf of a third person known as the “the beneficiary”. The result being legal ownership of whatever is transferred is separated from the fight to enjoy the benefit of it, with the interest of the beneficiary being safeguarded.
So why would you use the trust.
The main reason for setting up a trust is the protection of family interests
To protect the wife and children
If you wanted to ensure that both your spouse and children were provided for in the event of your death, you might considered creating a trust in your Will. The trust would give the spouse the right to live in the family home for the remainder of their life, whilst at the same time ensuring that the house would go to your children on the death of your spouse. You may want to do this, to prevent your spouse from cutting the children out of their Will if they were to re-marry.
To provide for children
A grandparent or parent might think about setting up a trust for the financial needs of one or more of their children. This could be for educational needs or the maintenance of a child with disabilities.
Irresponsible children. How to save them from themselves.
A settlor might wish to on their death to put the inheritance money into the hands of their appointed trustees to protect irresponsible or immature children with the inheritance.
To prove for long term care
If you had an aged dependant, such as a widowed mother. A trust could be created to hold funds to provide for long term care. The provision could be that on the death of the beneficiary the trust capital would revert to family or settlor.
To skip a generation.
If a wealthy settlor was confident that their spouse had ample funds for their own needs. They may wish to avoid adding to those funds and create an unnecessary tax liability. They could set up a trust for the primary benefit of the children, while not excluding access for the surviving spouse if needed.
Personal injury trusts
These are designed for people who have received Court awards as compensation for personal injury settlements. The compensation funds can benefit from having the award held in a personal injury trust. This is because the money held in the trust are disregarded for the purpose of means testing of Social Security benefits.
So how can Anstee & Co help you?
The above is just a brief out line of what can be a very complexed area for financial planning. To find out more please arrange a meeting with one of our expert financial planners. Meetings can be arranged at a time and location that is convenient to you. We have offices in Northamptonshire. Lincolnshire and Central London. We also have meeting rooms in Bedfordshire and Warwickshire.
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