Key features:
- Enables assets to be transferred into a trust during your lifetime
- Allows ongoing control through appointed trustees (which can include you)
- Provides a structured way to manage and preserve family wealth
- Can help protect assets from a range of potential future risks
- Can form part of arrangements that make use of available inheritance tax allowances
- Can benefit multiple generations over time
How it works:
A trust is established through a legal document (trust deed), which sets out how the trust operates. Trustees are appointed to hold and manage the assets on behalf of the beneficiaries, in accordance with the terms of the trust.
The person creating the trust (the settlor) can retain a significant level of control during their lifetime, including the ability to change trustees, add or remove assets, and determine who may benefit.
Assets placed into the trust are held separately from personal ownership and managed within the trust structure for the benefit of the intended beneficiaries.
EXAMPLE
An individual may wish to protect their home and savings for their children and future generations. By placing these assets into a lifetime trust, the trustees can manage and preserve them over time.This can help ensure that the assets are passed on in a controlled way and are not directly exposed to risks such as financial difficulties, relationship breakdown, or claims against a beneficiary’s estate. It may also allow for more effective use of available allowances, depending on individual circumstances.
Important to note:
- The structure and suitability of a trust will depend on individual circumstances
- Trustees have ongoing legal duties and responsibilities
- A lifetime trust is not designed solely to avoid care fees, and arrangements may be assessed under relevant legislation