Trusts
There are a number of Trusts that can be used either in your Will or set up during your lifetme to protect those assets.
Boleyn Legal Services
can advise you on the best option for your circumstance, set up & guide you through the process.
Having a Discretionary Trust in your Will means assets can be directed into it on your death for the potential benefit of any number of beneficiaries you choose.
Business Property Trusts
You may own a business that is eligible for an inheritance tax relief known as Business Property Relief, applicable to most types of trading or service business.
Under some circumstances this relief may not be fully utilised, resulting in a much larger than necessary inheritance tax bill.
A Business Property Trust is a type of discretionary trust aimed at avoiding this. However; more importantly those people with businesses virtually never plan for the passing on of their shares in their business, resulting in unforeseen consequences for the remaining co-owners as well as tax consequences.
Boleyn Legal Services, along with our partners at APS Legal & Associates can provide expert specialist advice in this area.
Property Protection Trusts
For most people their most valuable asset is the family home.
One of the main concerns people have is what would happen if you died & your surviving spouse went on to meet someone new?
It's possible that instead of leaving the house to your children they could leave it all to the new partner or spouse. Alternatively, you may have children from a previous relationship for whom you wanted to protect your half of the house.
We can incorporate a special type of trust in your Will which can ensure that your share of the family home is preserved for your children whilst still allowing your survivng partner or spouse to continue to live in it.
For more elderly people, this type of trust can also be very useful in protecting your house from being used to fund residential care home fees should you need to enter long term care.
Flexible Life Interest Trusts
Property Protection Trust Wills are very useful if you are house-rich, but what if you also wanted to ensure your hard earned money passed to your children too, instead of going to any new partner of your surviving spouse or partner?
Flexible Life Interest Trust Wills are a great way of ensuring that as well as the share of the house that you own, but also your capital, passes to your children, whilst not only allowing your partner to continue to live in your share of the house until they die, but also being able to use the income from any capital invested.
Again this type of trust is useful in care fees mitigation for those who are concerned about losing their wealth & house to funding their long term residential care.
Asset Protection Lifetime Trusts
Instead of personally owning your assets, such as your house, there are many advantages to transferring these into an Asset Protection Trust during your lifetime.
Whilst this is an extremely valuable way to prevent those hard-earned assets being used to fund long term residential care, this trust can also be useful in reducing, or even eliminating, thousands of pounds in the cost of administering your estate when you die, so your beneficiaries inherit more than they would have done under normal circumstances.
The trust also ensures your beneficiaries inherit immediately on you death rather than waiting for your estate to be administered, which can take many months & in some cases even years.
Spousal Bypass Lifetime Trusts
One way an inheritance tax liability can occur is when a person dies & a payment from a life assurance policy is triggered.
It's common for a payout to be made into the estate of the deceased, which when added onto that person's own assets can sometimes lead to an inheritance tax liability.
To prevent this life assurance policies are often written in trust to the surviving partner, but that merely delays any tax liability for when they too die. We can arrange for the proceeds of your life assurance policy to be paid into a spousal bypass trust when you die, which can be set up during your lifetime.
The trust itself is a
discretionary trust & you would normally specify the beneficiaries of this trust as being your surviving spouse or partner, your children & any grandchildren. However, this has special provisions built into it, for example, rather than your trustees giving trust funds directly to a beneficiary, they can loan them.
This means that when your surviving spouse or partner subsrquently dies, although they have had free use of the trust fund the amount they borrowed is seen as debt on their estate, which reduces the value of their estate when calculating their inheritance tax liability.
Once again, more inheritance for the other beneficiaries to the trust, less inheritance tax, greater tax planning flexibility!
Pilot Trusts
Most of us want to ensure that when we die we can pass on the maximum possible to our children, to better their lives.
However, if you are particularly wealthy, by leaving everything to your children you could inadvertantly be passing on an inheritance tax liability when they subsequently die. The inheritance you leave to them will be added onto their own estates, which could make them sufficiently wealthy that they then suffer an inheritance tax liability.
We can help solve this problem by setting up one or more pilot trusts to which you can leave your estate. Again these are discretionary trusts with provisions to allow your children to borrow from the trust rather than giving them trust funds, so that again when they die their estate value is reduced when adding up their inheritance tax exposure.
So, whilst pilot trusts won't help you inheritance tax liability they will undoubtedly help reduce the liability of you children... more inheritance for your grandchildren!
