Should you create a family trust

Should you create a Family Trust?

Should you create a Family Trust?
There are many good reasons for creating a family trust. A trust can help you protect your wealth from Inheritance Tax and divorce to give just a couple of examples and may be the ideal solution if you wish to leave as much of your money and assets to your loved ones as possible.

Trusts are legal arrangements where Trustees manage assets for Beneficiaries. One of the most common reasons for using Trusts is to protect bloodlines from divorce. When a Trust is in place, the assets don’t need to be included in the estates of Beneficiaries, which means they can be protected from any divorce settlements that might occur in the future.
Trusts can also be used to protect your bloodline from Creditors. If a Trust is structured correctly, the assets in the Trust can’t be taken away as part of a future Creditor Claim against the estates of the Beneficiaries. If assets are left ‘Absolutely’ in a will, they will become part of the Beneficiaries’ estate and therefore could be attacked by creditors.

Sideways Disinheritance
If you have worries about disinheritance, Trusts can give you the peace of mind you require. When assets are left ‘Absolutely’, problems can arise if a partner remarries after a death then dies before their new partner or divorces. This can prevent children from going without assets which were meant to go to them. This situation is known as Sideways Disinheritance and can be avoided when assets are left in Trusts. If assets are sent to a Trust, surviving spouses or partners will not be able to take them into their next marriage. This solution means partners can access assets but children won’t be disinherited.

Generational Inheritance Tax
Trusts have also provided a valuable solution to those concerned about Generational Inheritance Tax. If Trusts are not in place, anything above the Nil Band Rate may be taxed at 40%. At Miller Reeves, we can structure Trusts correctly to ensure the Inheritance Tax burden is reduced and you can pass on as much to your children and other loved ones as legally possible.

Care Home Fees
Another good reason for setting up a Trust is to avoid having to sell your home to cover care fees. Growing numbers of people have been forced to trade in their homes to fund care over recent years, but if a family home is placed in a Trust, you may be able to reduce the financial care burden substantially.

Get in touch
At Miller Reeves, we have many years of experience when it comes to setting up Trusts, asset protection and estate planning. We are a subsidiary of the Morgan Reach Accountancy Brand and have enabled people from all walks of life to protect their wealth. You are more than welcome to contact us at any point if you do have any queries about our diverse range of services. Find out more by calling 0333 300 1882 or using the contact form on our site.