Trusts arent just for the rich and famous

A trust is like a safety deposit—you can place your valuables in it (such as your home, savings and some investments) and it will protect them from a number of threats. It can also provide flexibility over how and when they are passed on to future generations. 

It is little-known that trusts have been used for hundreds of years. In fact, they date right back to when wealthy landowners began gifting their land to friends or relatives to look after while they went to fight in the Crusades.

Protect your home and savings

Trusts are commonly used to protect assets for loved ones. The Care Act 2014 introduced new rules, but many people still have to fund care in later life from their savings and the value of their home.

Protection of assets from care fees is high on the agenda for many people.

With the right advice, using a trust can protect your home and savings from the high costs of care, allowing you to pass on what you’ve worked hard for to your children and grandchildren.

A trust can be used to provide for a disabled child (or other beneficiary) who is either unable to manage their own affairs or is an unsuitable recipient of a lump sum inheritance due to its impact on their means-tested benefits.

Leaving an inheritance to a beneficiary in receipt of means-tested benefits can mean those benefits stop, and the inheritance you have provided acts as a replacement rather than a fund to provide some of the luxuries you want your beneficiary to enjoy. Leaving the inheritance outright to another individual with the hope they will use it to benefit your disabled child carries with it some inherent risks—most notably if that individual suffers financial or marital difficulties.

Using a trust avoids these problems and allows you to provide for your disabled beneficiary in the way you intended.

For those who wish to provide an inheritance to their children and grandchildren but are concerned about how it might be spent or the effect of their beneficiaries suffering marital/financial difficulties, a trust is a valuable estate planning tool.

Holding an inheritance until your chosen beneficiaries meet certain criteria through a trust can ensure it is used in the way you intended—for house deposits or University fees perhaps.

A trust can ensure your children and grandchildren don’t inherit until they reach a certain age, or that they can only use the inheritance for certain things, which might not include a Ferrari.

Using the right trust for your personal circumstances and objectives is vital, so taking advice from a specialist is an important first step.