Trusts

Here at Bowcock & Pursaill we have a large Trusts department with a proven track record in dealing with the formation and administration of Trusts. Our dedicated team can provide advice and guidance on all issues related to trusts.

When undertaking financial estate planning, many people overlook the potential idea of putting assets into a Trust because they simply do not fully understand how they work and the advantages (and possible disadvantages) of putting assets into one.

A Trust can be a useful means to:

• Save and reduce taxes
• Adapt to the possible changing circumstances of your beneficiaries
• Protect any potentially vulnerable beneficiaries
• Facilitate the transfer of assets from one generation to the next
• Allow some discretion over what beneficiaries receive (at the discretion of your Trustees)

If, on your death, your assets are given to a beneficiary outright, then they become theirs to do what they wish. This also means that the assets then belong to the beneficiary and form part of their estate for future events, such as bankruptcy, divorce and form part of their estate on their own death, meaning they would pass under the provisions of their Will. This means that what happens to those assets after your death is entirely out of your control.

Whilst this might be ok for some beneficiaries, if you have a beneficiary who is particularly vulnerable due to age, circumstance or due to mental capacity issues, then that beneficiary receiving the assets outright upon your death could be very problematic. If the assets are instead placed into Trust for the benefit of that beneficiary (and possibly others) then a Trustee, nominated by you, will be appointed to look after those assets on your behalf following your death and control what happens to them going forward. This therefore offers a level of security and peace of mind that whilst your intended beneficiary will be provided for, that they cannot be taken advantage of and assets potentially lost.

It is important to note however that Trusts are subject to their own Tax regime and can be liable for Income Tax, Capital Gains Tax and Inheritance Tax depending on the type of Trust, how and when it was created and the type of beneficiary that will benefit from it.

Ther are various types of Trusts, (each with their own potential advantages and disadvantages) but most commonly:

• Will Trusts
• Discretionary Trusts (including for pension death benefits)
• Disabled Person Trusts
• Life Interest Trusts
• Bare Trusts
• Bereaved Minors Trusts
• Personal Injury Trusts

There is also a requirement for all Trusts to now be registered with HMRC, regardless of whether they are liable to Tax, with very few exceptions. Our friendly team will be able to advise and assist you in order to make sure that your Trust, or any Trust you go on to create, is compliant with HMRC’s reporting requirements.

If you are questioning whether a Trust is the right thing for your, our experienced team of lawyers can discuss the options available to you and help you choose a way forward that best suits both your needs and those of your potential beneficiaries. Contact the team today.