No one wants to think about what would happen to our loved ones if we weren’t around, so it’s no surprise that the idea of making a Will more…
Trusts & Estate Planning
Trusts can be a valuable tool for ensuring your loved ones get the maximum benefit from the assets you have built up over your lifetime. However, to make sure you and your loved ones get the most out of a trust, it is essential to have the right legal advice and support.
Our specialist trusts and estate planning solicitors have many years’ experience in establishing and administering trusts, so we can provide the pragmatic legal guidance you need to effectively protect the things you own and plan for the future of your estate.
What is a trust?
A trust is a way of preserving assets – money, shares, property, personal possessions – for someone else. It involves one or more people (each a ‘trustee’) holding and managing these assets for the benefit of another person (the ‘beneficiary’).
A common example would be a sum of money put into a trust for a child, to be released when they turn 18. This gives peace of mind that the asset is ring-fenced and will be there for the beneficiary when the conditions of the trust are satisfied.
A legal document, known as a trust deed, places the assets under the control of the trustees. The trustees are responsible for managing the assets in line with the terms of the trust and in the best interests of the beneficiary, or beneficiaries, named in the trust document.
Trusts can be set up during your lifetime or in your Will and can run for a set amount of time (e.g. until the beneficiary turns 18) or longer, depending on your needs.
How our trusts and estate planning solicitors can help you
Our trusts solicitors can help with every aspect of creating and managing trusts, as well as advising beneficiaries of trusts. We can ensure everyone involved gets the maximum possible benefit from a trust, giving you complete peace of mind that everything has been done the right way.
You may be looking to set up a trust and want to know about all the different options and which type of trust best matches your goals. You might be a trustee who needs some advice on managing your responsibilities. Or you may be the beneficiary of a trust with questions or concerns about how the trust is being managed.
Whatever your needs, our friendly expert trusts solicitors are always available to answer your questions and provide any and all help you need to make the most of a trust.
Trusts and Estate Planning FAQs
How can a trust be used for inheritance tax planning?
Trusts are commonly used as a way not only of protecting assets, but of structuring an estate more tax efficiently.
Our trusts and estate solicitors will work with you to determine how your assets will be managed and how to mitigate or avoid inheritance tax, income tax and capital gains tax.
There are many types of trusts, including family trusts and discretionary trusts. We’ll talk to you about your options and the potential tax (and other) implications of each type of trust, helping you to make a fully informed decision about which option is right for you.
What are the benefits of having a trust?
Trusts can be a tax-efficient way of managing your estate and key assets. A trust can help to reduce your estate’s liability for inheritance tax, so your loved ones receive more of the benefits of your hard work after you are gone.
Trusts can also provide reassurance that your assets will be taken of properly and that your loved ones’ needs will continue to be met when you are no longer around. A trust can also be used to make sure your own needs are met in the future if there is a change in your circumstances.
Trusts can be set up for a variety of reasons, including:
- Setting aside assets for someone who isn’t yet old enough to take ownership of them
- Making long-term provision for dependents, especially those without the capacity to live independently or manage their own affairs
- Protecting the assets of someone who doesn’t have the mental capacity to handle them
- Setting money aside to fund your own long-term care
- Removing assets from your estate, so that those assets cannot be touched in certain circumstances (e.g. bankruptcy)
How do you set up a trust fund?
Your Wills, trusts and probate solicitor will be able to advise you on the type of trust that best suits your needs. They will take you through the options, discuss with you the various pros and cons, and help you decide on the nature and format of your trust.
You might choose to set up a trust via a trust deed, or you might make provision for a trust in your Will. Whichever vehicle you choose, the wording of the trust will be crucial to enabling it to do what you need it to do. Our Wills, trusts and probate solicitors are skilled at drafting trusts that are legally compliant, will stand the test of time and will lead to the outcome that you are looking to achieve.
There really is no substitute for engaging a specialist lawyer who prepares these documents day in, day out, to help you with this.
How much does it cost to set up a trust?
Given the range of options that exists, the cost of setting up a trust will depend on many factors – including the complexity of the issues on which advice is needed, and the drafting that will be required.
Our trusts and estate planning solicitors’ approach to fees is simple: we are transparent in the way in which we charge, and upfront when it comes to the likely cost of dealing with your matter.
When you come to see us, we will tell you how much we would charge to set up the trust on your behalf. We’ll also tell you about any ancillary liabilities that would or could arise, including tax that may be payable on the assets held on trust. That way, you will be completely clear about all of the costs involved before deciding how to proceed.
Who can you be a trustee?
A trustee must be:
- Over the age of 18
- Of sound mind (i.e. they must not be mentally incapacitated)
- Not bankrupt or otherwise disqualified from being a trustee
You should usually appoint more than one trustee so that the trust isn’t left in a situation in which there is no one to manage it if the trustee were to die or for another reason become unable to carry out their duties. Having at least two trustees is also a way of ensuring that balanced decisions are made; each trustee will have another person’s input.
As to the type of person that should be appointed a trustee, it’s best to find someone who will take the role seriously and will apply themselves diligently to acting in the beneficiary’s best interests. Your trustees do not need be legally qualified (solicitors like us are on hand to advise trustees when needed), but it is a good idea to appoint a person who will understand their duties and who is prepared to take on what are significant responsibilities.
Can a trustee be a beneficiary of a trust?
Yes, although a beneficiary should not be the only trustee. It is generally advisable to have at least two trustees, and that becomes essential where one of those trustees stands to benefit from the trust.
This will avoid a situation in which a trustee is making trust-related decisions for their sole benefit without the degree of independence, or a separation of ownership of the assets, that a second trustee would bring.
How can you use a trust to protect your family home?
A common concern for many older people is that they will need to sell their home to cover the cost of care in later life. Placing your home into a trust may seem like a good option to allow you to avoid liability for care fees and ensure your home can pass to your children or other loved ones when you pass away.
However, you must be very careful as these arrangements may be challenged if it is believed that you have deliberately removed assets from your estate purely for the purposes of avoiding care fees. It is therefore essential to take expert legal advice when looking at ways to protect your estate to ensure you are able to effectively achieve your goals.
What is a discretionary trust?
This type of trust allows the trustees some degree of flexibility over how income from the trust is used and, in some cases, how to handle the assets included in the trust. The exact terms of a discretionary trust and what powers the trustees have will be set out in the trust deed according to the instructions of the person setting up the trust.
Depending on the terms of the trust deed, trustees of a discretionary trust may be able to decide:
- How much of the trust income and/or capital to pay out to the beneficiaries
- Which beneficiaries to make payments to
- When to make payments to the beneficiaries
- What, if any, conditions to impose on the beneficiaries e.g. what they can use the trust income for
How long can trusts last for?
This will depend on the circumstances, but in general most types of trusts can run for a maximum of 125 years. However, it is more normal for a trust to be set up to last as long as it is needed e.g. until the beneficiary turns 18 and can manage the assets themselves, or until the beneficiary dies (for example, if the trust was set up to pay for a vulnerable person’s care).
Our trusts and estate planning expertise
We have decades of experience helping clients all over England and Wales to use trusts as part of their estate planning. This has given us a deep expertise in all of the issues involved in setting up and managing trusts, meaning we can help you to successfully navigate even the most complex issues.
Our team includes members of the Society of Trust and Estate Practitioners (STEP), with several of us holding the STEP Advanced Certificate in advising vulnerable clients. This means that, no matter your needs, we can provide the sensitive, expert advice and support to match your circumstances.
Barcan+Kirby is Lexcel accredited by the Law Society, reflecting the strength of our practice management and customer care, and we are independently regulated by the Solicitors Regulation Authority (SRA).
Contact our trusts and estate planning lawyers in Bristol
Our highly experienced estate planning solicitors are here to help with all trust-related queries for people in Bristol, South Gloucestershire and across England and Wales.