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SETTING UP A PROTECTIVE PROPERTY TRUST

Hampshire based Hunter & Cole Associates can help you set up a discretionary trust in your will

FLEXIBILITY AND PEACE OF MIND

‘I want to protect my daughter’s inheritance if she gets divorced in the future’.

 

‘I want flexibility, so my spouse, children and grandchildren receive what they need’.

 

‘My son has a drug problem; I want peace of mind that the money is used wisely for him, and not wasted’.

 

‘I’d like to help my nephews go to university or buy their first car, but don’t want to fix an amount of money they may need in my Will’.

 

‘My daughter has a learning disability, so I want people I can rely on to manage her money’.

 

 

There are many reasons why including a Discretionary Trust in your Will can help your loved ones.

 

• Flexibility

• Asset Protection

• Ability to respond to changing circumstances

• Providing for multiple generations

• Protection of vulnerable or young beneficiaries

• Inheritance Tax planning

FAQs

What is a Discretionary Trust?

In a standard Will, gifts are usually a fixed sum of money or a percentage of your estate. There is no flexibility if the circumstances of your beneficiary’s change.

 

A Discretionary Trust provides flexibility for how assets in the trust fund are used. Trustees will decide and consider the needs of beneficiaries at the time.

 

What is a trust fund?

This can be the whole or a share of your estate (property, savings, investments), or specific assets or sums of money.

 

Who can be beneficiaries?

Individuals, a group of people (e.g., my siblings) or charities.

 

What is the role of the trustees?

They decide when to give money or assets to beneficiaries based on circumstances at the time. Trustees have legal responsibility for the trust.

 

What is a Letter of Wishes?

This document sits alongside your Will and helps your trustees to understand your aims for how the trust fund should be used.

 

Who can be my trustees?

You can appoint family and friends (including beneficiaries) but you must be confident they will act fairly. Between two and four trustees should be appointed. Alternatively, you can appoint a professional trustee for neutrality and expertise.

 

How does a Discretionary Trust protect assets?

Assets are protected because the beneficiaries do not own the trust fund assets. Trustees will only make distributions if they think it is wise. This means your legacy is better protected from third parties or being squandered by beneficiaries.

 

Are there any ongoing costs?

Discretionary Trusts have specific rules regarding Income Tax, Capital Gains Tax, and Inheritance Tax. If the trust still exists two years after death, the trustees must register the trust with HMRC within 90 days. The exception is that if the trust incurs a UK tax liability earlier than the two-year anniversary, it must be registered within 90 days of the tax liability arising. Your trustees may need to seek financial, legal, or tax advice to manage the trust correctly and tax-efficiently. These costs are deductible from the trust fund. You may consider such costs to be incidental and outweighed by your reasons for including a trust and the benefits this can bring.

CONTACT THE EXPERTS

a couple embrace  in front of their new home , in the background an estate agent looks on

Setting up a discretionary trust has many benefits, so always ensure you take professional advice when setting one up, so it works as you want it to.

To book an initial appointment, call the experts at Hunter & Cole Associates in Hampshire on

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