Types of Trust
Trusts are very useful for tax planning and preserving wealth through generations especially when there is inheritance tax involved.
Popular trusts include the family trust (also known as discretionary trust), property trust and bare trust.
In a family trust the trustees are able to decide the amount of income or capital to pay each beneficiary whilst keeping the assets within the trust separate from their own assets. This ensures the trust assets do not form part of the estate for inheritance tax purposes.
Equally this type of trust gives protection against potential divorces and bankruptcy of any of the potential beneficiaries in the future.
A property trust can also be described as a life interest trust which allows each party the right to live in their home for their respective lives and can also move to a separate property on the same terms. The property is also in most cases protected from claims from local authorities in the event that the surviving spouse has to go into long term care.
A bare trust enables property to be held in the trustees name but the beneficiary may also take possession of both the income and trust property whenever they wish.
Paul Solomons is head of our Wills, Trusts and Estate Planning division and is highly experienced and knowledgeable in trust creation, administration and management.
Contact Paul on 01202 802807 to discuss any questions you may have or to arrange a free no obligation consultation at either our Bournemouth or Christchurch