Trusts FAQ's - Estate Planning - Mind At Rest Wills

trusts faqs

Trusts FAQ’s

How Can Trusts Eliminate The Tax I pay?

Trusts have been around since Medieval times and were originally created for Nobility and wealthy landowners to avoid paying taxes to the Crown. Whilst Trusts have changed substantially since then, Trusts can still reduce or eliminate inheritance tax payable. And will increase the amount of inheritance passed down to your children.

In simple terms, a Trust is a legal contract in which you (the settlor) give something you own to somebody (your beneficiary).

Trust & Inheritance Tax Planning (IHT)

Inheritance tax is a tax levied on your children after they lose both parents and is charged at a huge 40%. A recent article by money marketing showed that £1.3bn is paid every year needlessly by people who do not take action to mitigate against Inheritance Tax (IHT).

With some simple estate planning utilising Trusts you can reduce or eliminate the inheritance tax you pay and increase the amount of inheritance passed down to your children.

How Do I Protect My Home and Assets From Care Fees?

1 in 4 of us will require long term care at some point in our lives. If you own more than £23,250 in assets you are liable to pay all of your care costs, even if you have to sell your family home to do so.

Mind At rest Will’s and our legal partners can help reduce the impact of long term care costs and save your home from care fees through the use of Wills and Trusts.

With the average person being admitted to care for 4 years and the average care home costing £800 a week. It doesn’t take long for your entire life savings and assets to be wiped out.

Most of us work very hard over the years to buy our own homes and build up our savings for our retirement and would like to leave a “little something” for our children and grandchildren after we are gone.

How can I Protect My Children’s Inheritance?

Through the use of Wills and Trusts Mind At Rest can help protect your children’s inheritance. And ensure your your assets reach your children, grandchildren and other relatives, rather than ending up in the wrong hands. This is known as ‘bloodline planning’.

Without the correct “Bloodline Planning” some or all of your family’s inheritance could be lost.

When assets are distributed to beneficiaries “absolutely”, (ie. they receive cash, property or other assets as a direct lump sum payment) much can be lost through inheritance tax which is charged at 40%. Even after inheritance tax, these assets are at further risk of attack from any future divorce settlements, creditors and taxation.

If assets are placed into Trust rather than distributed absolutely then it will protect them from inheritance tax, future divorce settlements, creditors and taxation.

With the strategic use of Wills and Trusts, Mind At Rest Will’s can help you to ensure your children and grandchildren are able to benefit from the inheritance you want them to receive.

How can I preserve my business assets for my family?

Hard work and dedication has meant that you have built up a sound business to benefit you and your family. Naturally you would want to ensure that your loved ones are provided for in the event of your death.

So what if the worst should happen and either you, or a business partner were to die?

Without the appropriate Business Succession strategies in place, Your spouse, partner and children may not inherit your share of a business.

Business partners may not be able to buy out the deceased’s share.

The value of the business could depreciate owing to the inexperience of any beneficiary and the business may have to be sold and the proceeds become liable to inheritance Tax.

Who would actually be entitled to the deceased share of the business?

Without a valid Will. The deceased’s share of the business would be subject to the Laws of Intestacy and the person who inherits your business may not be the person you intended.

Would you have sufficient funds to purchase the deceased Director’s share from his family? Or would the business have to be sold?

If the business is sold then it could be at risk of Inheritance Tax at 40%, having lost any Business Property Relief available when the business was still trading. Mind At Rest Will’s offers business estate planning tailor made to suit you and your business.

It takes the Standard planning options available on the High Street a significant step further utilising a cross option agreement which offers significant protection to the business. And reduces the possible impact of Inheritance Tax dramatically.

Furthermore, the business and proceeds from a future sale of the business are protected for the bloodline. From Inheritance tax, remarriage, creditor claims and Nursing Care Fees through the use of Trusts.