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How a simple family trust can safeguard your family

Many people think that a family trust is only suitable for wealthier families, however in reality, a simple Trust can help you safeguard both yourself and your family against an array of unforeseen threats which could eat away at your hard earned estate.

Never has the use of Trusts been so important due to the rising number of families who are effected by inheritance tax.  Depending on your circumstances, any assets over the Nil Rate Band which is currently £325,000 could be taxed at 40% upon death.

This means for many who have conscientiously saved throughout their life in the hope to help out loved ones may find that a large chunk of these assets are liable to be taxed at 40%.

The number of people paying inheritance tax has more than double over the last ten years as the increase in IHT has failed to correlate with the rise in asset value, which is why for many IHT is seen as an unjust tax.

Whilst it is not possible to wholly “avoid” inheritance tax there are certainly steps you can take to significantly reduce the burden.

Commonly this starts with a well drafted will and a Trust.

How does a trust work?

Surprisingly a trust really doesn’t have to be a complicated document and is in fact one of the easiest ways of simply moving money out of your estate whilst retaining full control of those assets.

The most popular assets to put into a trust are property, savings and investments.

A trust can also hold life insurance policies, this is significant as many families who would not consider themselves wealthy as such, find they are pushed over the £325,000 boundary as a result of a life insurance policy. For example if a life assurance policy is placed into trust, when the settlor dies the proceeds are payable to the Trust and IHT is avoided.

Furthermore, many believe a Trust is purely created for tax advantages however, government research has shown the main motivation is in fact to have the ability to control assets.  This may include passing those assets to children or grandchildren when they reach a certain age with any tax advantages being an additional bonus.

At Solomons Solicitors we have over 50 years combined experience in creating Trusts to suit your individual circumstances whether your goal is to save tax or to hold assets until such a time you wish to pass them on, we are able to assist you every step of the way.

We offer a FREE no obligation initial meeting at either our Bournemouth or Christchurch office to discuss any questions you may have about wills, Trusts and estate planning in general.

If you would like to book a free meeting please contact us by email office@solomonslaw.co.uk or call us on 01202 802807.

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