A Trust is for life, not just for Christmas
Whilst a trust may not sound like the most exciting gift for Christmas, there are a number of benefits of having one.
18 December 2023
Technology, Media and Telecommunications
Our dedicated Technology team can support your business locally, nationally, and internationally.
Imagine the scene – it’s Christmas Day. An air of wonder permeates the atmosphere, the festive cheer is here, and your children race downstairs to tear open their presents, more eager than they’ve ever been before.
What could it be – the new games console they’ve been asking for? A new TV? Or maybe even…
“Surprise! We’ve set up a trust for you!”
Now, whilst a trust may not sound like the most exciting gift for Christmas, there are a number of benefits of having one.
Reducing the value of your estate now
If you put assets into a trust, providing the relevant criteria are met, they no longer belong to you and once the gift is survived by 7 years will not be included in the value of your estate upon death.
Putting funds aside for future purposes
Would you like to put funds aside for future school/university fees? Maybe for your grandchildren, even if they aren’t born yet? This can easily be done through a trust and allows you to start the 7-year clock.
Asset protection
Funds held in trust benefit from a certain degree of protection against divorce and bankruptcy.
Using a trust allows you to gift funds for the benefit of your children, even if you are worried they may be in a rocky relationship or possible a spendthrift themselves.
The trustees will be in charge of the assets, meaning they can ensure the capital is not wasted.
Second marriages
A trust can take into account your specific family circumstances, ensuring that your capital assets can be protected for your children in the event of you remarrying
Deferring capital gains
Trusts can be used to defer the capital gains which would otherwise arise on a direct gift of assets to family members.
Trusts, when correctly used, can be an excellent vehicle for asset and tax planning. Whilst it may not be a present that you’d put under the tree, it could bring you peace of mind for many Christmases to come.
Further information
If you’d like to discuss whether a trust might be beneficial for you, please get in touch with us and a member of our Trusts & Probate team will contact you for a no-obligations chat.
Bishop Fleming’s Trusts & Probate team are well equipped to review your personal circumstances, provide you with an estimate of your exposure to inheritance tax and provide advice on mitigating that exposure.
You can find more information on our Trusts & Probate Services page.
Related insights
How your relationships can affect your estate
It’s a common misconception that people who live together will benefit from the same tax treatment as those who are married or in a Civil Partnership, so-called common law partners.
Probate and identifying beneficiaries
Acting as executor of an estate under a will can be complicated and demanding at the best of times, but this can be particularly challenging when it is not clear as to whom are the beneficiaries.
