Will Trusts are normally used to protect or preserve assets so that your family is well provided for.

In principle, a trust is a simple concept. A trust is the formal transfer of assets (for example property, shares or cash) to a small group of people (normally two or three) with instructions that they hold the assets for the benefit of others.

There are many reasons why a trust might be useful to include in your Will. Whether you choose a trust or not will depend on your personal circumstances and what you want to achieve.

Circumstances, where trusts are used in conjunction with a Will:

  • to provide for a surviving spouse or partner after death while protecting the interests of any children; this can be particularly important for families where there are children from previous marriages
  • if you are a couple and own your property jointly
  • to protect the inheritance of young children until they are old enough to take responsibility for their own affairs
  • if you are an unmarried couple with significant estates, you can use a trust to help reduce your inheritance tax liability
  • to provide for vulnerable relatives who are unlikely to be able to look after their own affairs
  • to help succession planning in a family business.

What is a Will Trust?

A Will Trust enables you to have greater confidence and control in how your assets will be used in the future and are a way for families to securely hold assets and pass them from one generation to another.

A Will trust is a trust that has been written into a Will and only comes into effect after you have died. You can amend the Will trust at any time whilst you are alive, which means that you remain in complete control of your assets during your lifetime.

The trust provisions are set out in the Will. The trust document will clearly identify the trust assets, who is responsible for looking after the assets (trustees), who is the benefit from the assets (beneficiaries and any rules or conditions to which both the trustees and beneficiaries must adhere.

Popular types of Will Trusts include:

Trusts for Minors and Other Young People

These are referred to as Accumulation and Maintenance Trusts and are set up to look after monies for children. The idea is that the money is invested for the children until they attain an age specified by the Testator. The age can be from 18 upwards but the usual ages are 18, 21 or 25.

Discretionary Trust

Sometimes, certain circumstances may make it difficult to ascertain how much money a Beneficiary is going to need and when they are going to need it. This is particularly true when making provisions for children and other dependent relatives. This type of Trust can also be used to allow Trustees to manage a disabled person legacy without impacting on means-tested benefits. A Discretionary Trust gives the chosen Trustees the power to give a varying amount of money to a Beneficiary, as and when they need it. The fund for the rest of the time is invested.

Life Interest Trust

This type of Trust is normally used to ensure that a spouse or partner from a later relationship will not be deprived of a place to live. It ensures that any children from a previous relationship do not lose their inheritance if the surviving spouse or partner becomes involved in a new relationship after the Testator’s death.

Property Will Trust

A Trust drafted into a Will, that enables a property to be passed to nominated Beneficiaries. Yet allows someone to occupy a property while they need to.

To find out more information about the types of Will Trusts we offer, please contact us