Trust & Executorships
Trusts allow you to make gifts without giving the recipient complete control over the asset and/or the income it generates. That control can be vested in the hands of the trustees (who might include you). Most gifts into trust will result in an IHT liability, depending on the nature, timing and terms of the gift and the value of other chargeable gifts in the preceding seven years. Ten-yearly and exit charges may also arise. You can also use a nil-rate discretionary trust in your Will to create an opportunity, on your death, for your executors to bypass your spouse and give assets worth up to £300,000 to other beneficiaries,
To preserve flexibility, you may consider leaving the decisions to trustees nominated by you. They can take into account the circumstances following your death, and allocate property in a fair and tax-efficient way.
The trustees will usually be guided by a (non-binding) letter of wishes.
Trusts are extremely useful instruments for tax planning purposes. They are particularly useful for holding shares in private companies as part of a family financial or tax plan - especially if you want to reduce inheritance tax liability in your estate.
They can also be useful for:
Providing funds for your children's education, maintenance etc. │Restricting access to property by future beneficiaries │Providing for people who are mentally or otherwise incapacitated │Gifting to charity
There are four main types of trust:
Life interest trusts │Discretionary trusts │Accumulation and maintenance trusts │Bare trusts
Each type of trust receives different tax treatment and can be adapted to many different purposes.
To take full advantage of trusts in your tax and estate planning you need to receive expert help and advice.
We can help you determine which types of trust are suited to your purposes, prepare the necessary documentation, and advise on appropriate trustees.
