Trusts

Flexible Life Interest Trust (FLIT)

This Trust is incorporated as part of a Will and is usually created on the death of the first spouse, this will be advantageous to couples who own their own property and have additional savings or shares that they wish to incorporate.

The Trust has a number of benefits:

• This Trust can incorporate investments and savings as well as a share of property.
• This Trust may affect what share of a home or asset is assessed should the owner require care (see more information).
• The Trust preserves assets for the nominated beneficiaries.
• The Trust protects against beneficiaries being declared bankrupt.
• The Trust can guarantee an appropriate distribution of assets where couples each have children from other relationships.
• The Trust is flexible and can be changed to another type of trust should personal circumstances or changes in legislation dictate.
• NB: This trust is discretionary and therefore any property placed in a FLIT may lose the RNRB (residents Nil Rate Band) Inheritance Tax (IHT) uplift. This means it may no longer be suitable for reducing IHT liabilities. Please see more information and contact us for more advice.

For more information about Flexible Life Interest Trusts

Protective Property Trusts

A Protective Property Trust is our most popular Trust. It enables you to safeguard your property for future beneficiaries, normally the children. It is activated on first death and has the following benefits:

• This Trust may affect what part of the home is assessed should the owner require care. (please see more information)
• The Trust gives the surviving spouse control and security of tenure in the property for their lifetime.
• The Trust protects against any potential beneficiary being declared bankrupt.
• The Trust can guarantee an appropriate distribution of assets where couples each have children from other relationships.
• This trust does not affect the (residents Nil Rate Band) Inheritance Tax (IHT) uplift. If you have concerns over Inheritance tax Findon Legal Consultants can support you by working alongside an Independent Financial Advisor.

For more information about Protective Property Trusts

Lifetime (Family Protection) Trust

These are  set up during the lifetime of the owner. With the Trust having several unique advantages:

• This Trust protects the WHOLE of the property (Please see more information).
• The Trust provides additional protection and allows control and rights over the property compared to giving the property away whilst still alive.
• Property placed in Lifetime Trust is not formally part of the estate on death and is therefore not subject to the probate process saving time, money and reducing administration at a difficult time.
• The Trust is Suitable for a single owner.
• This Trust may affect whether a home is assessed should the owner require care.
• The Trust preserves assets for the nominated beneficiaries.
• It is more difficult to contest or challenge a Lifetime Trust compared to a Will..
• If a beneficiary is deemed unreliable, the trust  has the flexibility to allow access to funds at an age where the beneficiary is viewed as reliable.
• There are limits as to the value of a property that can be placed in trust and there may be 10 yearly tax charges depending on any increase in value (see more  information)

For more information about Lifetime Trusts

Discretionary Trusts

Discretionary Trusts are a  useful tool when considering Inheritance Tax (IHT). This is particularly beneficial to unmarried couples.

• The assets that would otherwise have been passed on to the surviving partner or spouse are instead placed in trust. The surviving partner can be made a beneficiary. Trustees must be appointed.
•  Under the terms of the Trust, the beneficiary does not have absolute entitlement to the assets and therefore cannot demand income or capital as they please.
• As a result, the assets placed in trust are not treated as part of that individual’s estate for tax purposes.
• A Letter of Wishes is provided alongside the Will. The letter states the express wishes of the deceased and also ensures that adequate provision is made for the surviving partner.

Disabled Discretionary Trust

• These Trusts are set up by parents or other relatives as a way of safeguarding the inheritance of a disabled child or relative. This ensures that the monies left to disabled beneficiaries by their parents are not eroded or set against any assessment or entitlement to state benefits.
• It is usual for other siblings to be the alternative beneficiaries to these Trusts.
• A Letter of Wishes should be provided alongside the Will. The letter states the express wishes of the deceased as to how the money should be managed on behalf of the disabled beneficiary.

Contact Findon Legal Consultants for more information on these or any other Trusts