If you are looking for the best, most comprehensive way to protect your beneficiaries either during your lifetime or after you have gone, a Trust will likely be the ideal way to achieve your needs. A Trust is a fiduciary agreement that’s part of an Estate Plan. Traditionally, Trusts are used to hold assets for one or more Beneficiaries, and they may offer significant estate tax and other protective benefits. With Trusts being an incredibly useful way to protect and manage assets, making the right decisions when it comes to Trust Planning relies on receiving accurate, clear advice. At Lester Brunt, we take the time to fully understand your needs and requirements in order to guide you to the most suitable Trust arrangement for your needs and circumstances. Our Trust planning service helps advise about the trust options available to you, and the ways in which you can manage and protect your finances, both during and after your lifetime.
This allows for the preservation and protection of assets, facilitates asset distribution at the right time according to specific wishes, provides for the financial well-being of beneficiaries and ensures privacy and confidentiality. Our Trust Planning Service ensures that you know how to organise all aspects of your Trust so that your finances, assets and estate can be managed in a way that aligns with your wishes. Trust Planning is one part of Estate Planning, which also encompasses Will Writing, Estate Administration (Probate), inheritance tax mitigation and Gifting.
Despite what many people think, trusts can be beneficial for all sized estates and not just very large ones. There is a common misconception that a trust is only suitable for the extremely wealthy. But the reality can be very different, there are many benefits to a trust, including:
Assets held in a trust generally bypass the probate process meaning that trust beneficiaries can access the assets irrespective of the granting of probate.
Given that assets in a trust generally bypass probate, the details of the trust, including its assets and beneficiaries, can remain private and out of the public record.
A trust arrangement allows for the deceased to set aside assets for the benefit of a minor beneficiary with access restricted until the minor reaches a pre-determined age. Trusts are therefore especially beneficial for minor beneficiaries or second families.
There are a number of schemes which allow a settlor to transfer assets to a trust that is effective for inheritance tax purposes whilst still allowing the settlor access to income or capital.
The levels and bases of taxation, and reliefs from taxation, can change at any time. The value of any tax relief depends on individual circumstances.
There are many situations where you might want to defer transferring assets to a beneficiary. For example, they may be about to go into care or are in the midst of divorce proceedings or some similar financial challenge. Whereby the asset transferred might just be swallowed up. A trust arrangement allows for a more beneficial transfer date that protects the value of the inheritance.
There are rules that limit the life of a trust – referred to as the Perpetuity Period – however these are quite generous, and a trust can be established for periods up to 120 years. This longevity can be hugely advantageous in the efficient transfer of wealth across multiple generations.
Dependent upon the type of trust established, the trust assets do not ‘belong’ to any one specific individual. This precept means that should a beneficiary of such a trust face financial challenges (e.g. divorce, creditors, lawsuits, bankruptcy etc.) there is no automatic access to the trust assets by a creditor, ex-partner or other similar person or group.
In an age where the online world is at our fingertips, why shouldn’t your wealth management be there as well? Our Online Services allow you to access all your wealth investments in one smart place. Whether you’re already registered, or just about to, here are some great features that can help you get the most from your online account.
Registering for Online Services with an activation code allows instant access. If you haven’t got a code, please contact your adviser. Registering online ensures all information is password protected.
Set your communication preferences to receive your digital reports and electronic correspondence.
Make online debit card payment for ISA and any JISA top ups with a debit card
linked to your account, on demand and at a time that suits you. Make payments to Unit Trusts, Retirement Accounts and new ISAs. (Speak to your adviser in order to get this process started) View the value of your investments in a range of currencies and see a breakdown of
this valuation. Instant notifications when a new document is available to view.
For every client opting for paperless correspondence, St. James’s Place will donate £5,to the St. James’s Place Charitable Foundation.
The value of an investment with St. James’s Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested.
The favourable tax treatment of ISAs may not be maintained in the future and is subject to changes in legislation.
Less well-known is that children can also have a pension fund as soon as they are born – and setting one up can bring significant tax advantages. Even if your child is a non-taxpayer, they will still get basic-rate tax relief on contributions. That means a maximum of £2,880 a year is automatically grossed up to take account of tax at 25%, giving an annual investment of £3,600
The concept of a trust arrangement dates back to the time of the crusades in the 11th century. It’s unsurprising, therefore, that many different styles of trust have arisen over that time.
Listed below are some of the more common arrangements you might come across or wish to utilise.
These are trusts where the beneficiary has the right to all income from the trust during their lifetime; however, following their death the assets pass to preordained beneficiaries. An example of this would be where the terms of the trust say that when you die income from an investment or the right to live in a property passes to your spouse or partner for their lifetime. However, when they die the investment/property pass to your pre-determined beneficiaries. In this arrangement, your spouse or partner is the ‘income’ beneficiary and has an ‘interest in possession’ in the trust. They do not have a right to the investment/property themselves.
These are where the trustees can make decisions (as allowed by the trust) about how to use trust income and capital. Whilst there may be a comprehensive list of beneficiaries the trustee has ‘discretion’ as to who gets what and when. Because of this ‘discretion’ the trust assets do not form any part of the estates of any of the beneficiaries which offers considerable planning opportunities.
A living trust is a lot like a Will in that you set out your wishes about your assets and your heirs. However, whilst a Will only becomes effective when you die, after the probate process, a living trust is effective while you are still alive. A living trust bypasses the need for probate and assets can be managed without the need to wait for the Grant of Probate that would otherwise be needed. This arrangement can facilitate the transfer of assets during your lifetime as well as protect beneficiaries from being excluded from an inheritance should the surviving spouse/partner remarry in the future.
Here at Lester Brunt, we are firm believers in making financial management simple to understand and accessible to everyone. Hence our Trust Planning Service is aimed at giving you the tools required to establish a trust arrangement built on solid well-formed foundations. We want you to feel completely in control of your planning with knowledgeable advisers who provide advice that is tailored to you and your life.
Trusts are not regulated by the Financial Conduct Authority.
For more details about services that we offer reach out to us on 01202 695801, or click the button below.