Family Trusts

A trust is an obligation imposed on Trustees to hold and deal with certain property in particular ways (specified in the trust deed) for the benefit of specified Beneficiaries. The Trust fund may comprise money, insurance policies, shares or a property.

Consider the following:

• Childrens’ Trusts: The Trustees have power to use the income produced for the children’s benefit or accumulate it. The children have a right to the income when they reach eighteen (or perhaps later). The trust fund can also pass to the child at that age or even later, although in the mean time it can be used for their benefit.  Such a trust could also be created for a improvident or financially vulnerable Beneficiary so that he or she does not get the trust fund until later in life.
• Life interest trusts: These arise for example when a Beneficiary gets a right to live in a house or a right to the income from the trust fund for his or her lifetime. Upon his death, the trust fund would then pass to another Beneficiary. Variations of this type of trust can be used to provide financial security for the lifetime of a handicapped or disabled Beneficiary.
• Discretionary trusts: The Trustees have power to distribute and use the income and capital from the trust amongst a class of Beneficiaries. This type of trust is particularly useful where there is any doubt as to the future financial security or requirements of the intended Beneficiaries. Under a discretionary trust, the Trustees will have the ability to pay the income or capital to any of the Beneficiaries within the class.

The creation of a trust is not only a flexible and secure method of making gifts, it can also be used as part of a lifetime Tax planning regime to reduce the overall effects of Inheritance Tax payable on death.

Contact us for an informal discussion to find out if a Trust can help you plan your families financial future