Manchester Trust Solicitors
What is a Trust
A trust is created when someone (settlor) transfers the ownership of his or her assets into the name of another (trustee) to hold for the benefit of a third party (beneficiaries). Trusts may be created during your lifetime or by your Will.
At Latimer Lee Solicitors Limited our Trust Solicitors have experience is setting up trusts in order to suit your circumstances and requirements.
Why are trusts used?
Trusts may be used for a number of reasons including the following:-
- Reduce tax liability
- Assisting persons with an incapacity
- Estate Planning
Our Trust solicitors are approached by a number of clients wishing to make provisions for family members but do not wish to give them money outright due to family circumstances.
- I wish to leave my estate to my children but I do not wish them to inherit the monies immediately as they will squander the monies away. Is it possible for them to receive the monies when they are older?
- I have a mother who lives in a flat, which I own and when I die I wish for her to remain living in the flat rent free and have enough money to live on. However, I also have two children who are currently 8 years and 10 years and I wish to leave the bulk of my estate to my children when they are 25 years.
- I want to leave my estate to my only son but he is in financial difficulty and likely to become bankrupt.
At Latimer Lee Solicitors Limited we are able to offer solutions to the above situations to ensure your wishes are taking into consideration and protect your estate.
Taxation of Trusts
The Finance Act 2006 made radical changes to the taxation of trusts and legal advice must be taken in this regard. The trusts mentioned below are subject to their own tax regime.
Types of Trusts
Assets are held on trust for a beneficiary until he attains the age of 18 years.
18 – 25 Trusts
These trusts can only be created by a parent in a Will to delay payment of funds to their children up to the age of 25 years.
A discretionary trust is created when the settlor chooses a group of beneficiaries and gives his trustees powers to determine how much (if anything) each beneficiary should receive, and when.
Life Interest Trusts
A life interest trust gives a beneficiary the right to enjoy trusts assets without becoming the legal owner. This type of trust is normally created by Will and can be used to allow the surviving spouse to receive income from the trust assets for the remainder of his/her lifetime and on his/her death the capital is held on trust for someone else i.e. the children.
Protective trusts share the characteristics of a life interest trust and a discretionary trust. It would involve a life interest trust in favour of a specified beneficiary but this would be brought to an end upon a certain event i.e. bankruptcy. Thereafter the trusts assets will be held on a discretionary trust for a group of beneficiaries.
Trusts for the Disabled
In reality, this trust is a discretionary trust formulated to assist disabled persons, without prejudicing any rights and benefits that disabled persons may be entitled to.
As mentioned previously when you place your assets into a trust you are no longer the legal owner of those assets so careful consideration should be taken before creating a trust. Once you have made the decision that creating a trust is suitable for you, our Trust solicitors will discuss with you the type of trust required to suit your circumstances.