Protecting Your Home
Simply put, a trust is an arrangement whereby somebody (the trustee) holds an asset (e.g. cash, shares and property) for the benefit of somebody else (the beneficiary). They can be used to protect assets, for example from inheritance tax, as well as ensuring a loved one is provided for in the future.
You can make a trust that will take effect during your lifetime by creating a trust deed. Alternatively you might make a trust that will kick in when you die by setting out the terms of the trust in your Will.
Joint tenants (Most Common)
As joint tenants (sometimes called ‘beneficial joint tenants’):
- you have equal rights to the whole property
- the property automatically goes to the other owners if you die
- you cannot pass on your ownership of the property in your will
Tenants in common (Severance of Tenancy)
As tenants in common:
- you can own different shares of the property
- the property does not automatically go to the other owners if you die
you can pass on your share of the property in your will
Change your type of ownership
You can change from being either:
- joint tenants to tenants in common, for example if you divorce or separate and want to leave your share of the property to someone else
- tenants in common to joint tenants, for example if you get married and want to have equal rights to the whole property
Whether you choose to set up a trust now, or through your Will, you need to make sure that it’s going to work properly so that your beneficiaries benefit from the trust when they are supposed to. You’ll also need to make sure that, while the trust is on going, the trustees act properly and in the best interests of the beneficiaries.
Our trust department have the expertise to ensure you can create a trust that does exactly what you need, as well as providing clear, practical advice to the trustees in charge of a trust. Our goal is to make it as simple as possible to ensure your loved ones get the full benefit of the assets you wish to set aside for them.
Sometimes called ‘property protection trusts’ or ‘asset protection trusts’, this type of trust can be set up straightaway and used to protect specific assets, most commonly your home.
Lifetime trusts are often used where you are concerned that you may need to move I to a residential care home in the future and want to ensure your house is not considered as an asset for any assessment to determine what contribution you will need to make towards care home fees. This can be essential to protect your loved one’s future inheritance.
What is a Lifetime Gift Trust?
A Family Protection Trust is a legal way to make sure that your wishes are carried out exactly as you intend. Working alongside your Will, the Trust will hold your assets and save your family the delays and expense of probate. You can protect your home, cash, investments and bank deposits in your Trust.
If you’re interested in arranging a Family Protection Trust, contact us today.
Benefits of a Lifetime Gift Trust
A Family Protection Trust can give you peace of mind that your wishes will be respected and your family will be provided for as you wish.
- There’s no need for probate, saving your family time and money
- Sideways disinheritance is prevented, so your loved ones are guaranteed their inheritance
- Children can inherit at a time right for them
- Your family will find it easier to plan for any Inheritance Tax issues
- A Trust is much harder to challenge than a Will, if there are any claims
Probate is expensive and can take six months, but with a Trust, your estate will pass directly onto your loved ones as you wish with no requirement for probate.
Your assets can be placed in a Trust without a lifetime Inheritance Tax charge if they’re worth up to £325,000 for a single person, or £650,000 for a couple.
How it works
A Family Protection Trust acts as a safety deposit box for your assets, which you can access at any time. As you control the Trust, you will be able to make as many changes you want. Just as you choose who benefits from your Will, you can also decide who will inherit from your Trust.
You nominate people to be responsible for the Trust’s assets. We help make choosing these Trustees simple. They could be:
- Your partner
- Other family members
- Trusted friends
You will continue to be the main Trustee during your lifetime.
When you are gone, the Trustees will help carry out your wishes in the future and provide for your family. Your family can decide when they would like to receive their inheritance and the assets will also be protected from bankruptcy repayments.
Bear in mind that a Family Protection Trust must be created during your lifetime, while you’re of sound mind.
This allows you to specify the details of a trust to be created when you pass away. Also sometimes referred to as a ‘testamentary trust’, this can allow you to ring-fence a property or other specific assets to benefit your loved ones after you are gone.
A common reason for creating a Will trust is to ensure a child or other dependant without the capacity to live independently will continue to be provided for when you are no longer around to look after them. They can also be used if you are married with children and are concerned that your spouse may marry again after your death, potentially affecting your children’s inheritance.
When you set up a trust, you will need to specify how long the trust is intended to run for. This can usually be up to a maximum of 125 years, unless you are setting up a charitable trust, in which case there is no limit on how long it can run.
Common examples of how long a trust might run for include until a child turns 18 and is able to manage the assets contained in the trust themselves or until the death of the beneficiary e.g. when using a trust to provide for a loved one without the mental capacity to care for themselves.
Why choose WDS
Our Company have been helping people to create and manage a wide range of trusts for over three decades, giving us the experience and expertise to help you put the right measures in place to protect your assets and provide for your loved ones.
As part of our companys Wills, Trusts and Probate team, we can also advise you on making a Will, creating Lasting Powers of Attorney, applying to be a Court of Protection deputy and all aspects of estate planning and administration.
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