Manchester Trust Solicitors

Trust

What is a Trust?

A trust can offer legal protection for your loved ones. A trust is created when someone (the settlor) transfers the ownership of his or her assets into the name of another (trustee) to hold for the benefit of a third party (beneficiaries). Trusts may be created during your lifetime or by your Will. When you place your assets into a trust you are no longer the legal owner of those assets so careful consideration should be taken before creating a trust.

Why are trusts used?

Trusts may be used for several reasons including the following:

• Reduce tax liability
• Assisting persons with an incapacity
• Estate Planning
• Investment

How can you protect money for your children and beneficiaries?

If you have a mirror will or no will at all, if you were to die your property will go to your spouse or civil partner. If your partner later needs to go into a care home, the fees will be taken until £23,250 left.

If you have children or other beneficiaries, for them to inherit your proportion of your property and assets you will need to have a Trust Will in place. This means if you or your partner passes away half of the home and savings are protected, excluding them from care home fee calculations.

What types of Trusts are there?

There are numerous types of trusts to choose from which depend on your circumstances including if you have children or a beneficiary under the age of 18 and if you would like them to access their inheritance between 18 and 25 years of age.

• Bare Trusts

Assets are held on trust for a beneficiary until he attains the age of 18 years.

• 18 – 25 Trusts

These trusts can only be created by a parent in a Will to delay payment of funds to their children up to the age of 25 years.

• Discretionary Trusts

This is created when the settlor chooses a group of beneficiaries and gives their trustees powers to determine how much (if anything) each beneficiary should receive, and when.

• Life Interest Trusts

This type of trust gives a beneficiary the right to enjoy the trust’s assets without becoming the legal owner. This type of trust is normally created by Will and can be used to allow the surviving spouse to receive income from the trust assets for the remainder of their lifetime and on their death, the capital is held on trust for someone else such as their children.

• Protective Trusts

Protective trusts share the characteristics of a life interest trust and a discretionary trust. It involves a life interest trust in favour of a specified beneficiary but this would be brought to an end upon a certain event such as bankruptcy. Thereafter the assets of the trust will be held on a discretionary trust for a group of beneficiaries.

• Trusts for the Disabled

This trust is a discretionary trust formulated to assist disabled persons, without prejudicing any rights and benefits that disabled persons may be entitled to.

How can we help?

When you have decided that creating a Trust is suitable for you, our Trust solicitors will discuss which type of Trust is required and suits your circumstances.

To contact our Trust solicitors contact us on 0161 798 9000.