As part of your estate planning a Lifetime Trust can be created to safeguard your assets and ensure they ultimately pass to the beneficiaries, no matter what happens.
Lifetime Trusts are often known as Property Protection Trusts, or Family Asset Protection Trusts.
Unlike a “Will Trust”, which come into force only upon death, a “Lifetime Trust” is established straight away. Your home can be placed into a trust immediately and is protected from then on.
Some of the benefits of a Lifetime Trust are:
- Sideways disinheritance – protecting against money passing outside of the family bloodline
- Contesting of Wills – protecting against potential claims against your Will
- Generational tax planning – reducing your grand children’s tax liability
- Probate – reducing fees and delays
- Vulnerable beneficiaries – ensuring benefits continue despite inheriting money
We understand that choosing the right Trust for you can be complicated. However, understanding the differences between the Trusts is crucial because you need to know that your assets will be managed according to your wishes after you pass away.
Our consultants’ job is to show and guide you through the process of choosing and setting up a Trust, and they will take the time to ensure you understand the choices available.
It is important to know that this type of Trust is not to mitigate inheritance tax but simply to ring-fence and protect assets during and after your lifetime.
The tax treatment of Lifetime Trusts needs to be worth considered very carefully as it can attract inheritance tax if your house is worth more than the nil-rate band.
A Will can only dispose of your assets when you die and therefore cannot protect them whilst you are still alive. For example, the value of your estate may be eroded by having to pay for care fees, during your lifetime, meaning there may be little, if anything left for your loved ones’ when the Will is read.
By having your Trust in place now you can grow older having the peace of mind in the knowledge that your chosen trustee’s (this might be your children) can help to manage the Assets in the Trust if you are no longer capable.