You made something we were dreading remarkably easy and your forthright and professional attitude was extremely impressive. Kevin Brown

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Trusts & people

Trusts and People article intro picture

There are an almost infinite number of reasons why a trust might be used to allow people control over assets whilst ensuring that others can benefit from them. Here are some examples:

  • To provide for young children until they are old enough to inherit.
  • To provide for disabled children who may be unable to deal with money or might otherwise lose entitlement to state benefits.
  • To provide for a spouse, civil partner or life partner whilst protecting assets which may then pass to others once they die.
  • To provide a framework for estate planning, minimising tax liabilities.

Case study

Robin and Robina have young children and they need Wills providing for their children’s financial and physical welfare. Robina’s sister, Roberta, lives close and knows the children well, so she has agreed to act as their guardian. Robin and Robina are confident that she would be the best person to care for their children’s physical welfare until they reach majority and that she would maintain contact with both sides of the family.

The couple have some concerns over her financial acumen and are not certain that she would be able to look after the amount (roughly £500,000) available from life cover, savings and the sale of their home should they both die. Robin’s brother Richard is an accountant, while Robina’s cousin Clara is in business. They think it would be better for them to look after the money side of things, but they are unsure how to arrange all this.

The solution is actually quite straight forward. Mirror Wills can be prepared for the couple in which they appoint Richard and Clara as their executors and trustees. This means that it will be their job to sort out Robin and Robina’s affairs when they both die and that they would act as trustees to look after the finances until the children are old enough. The earliest that the children could inherit in their own right is once they are 18, but Robin and Robina feel this is too young to deal sensibly with a substantial inheritance. Accordingly, their Wills delay inheritance until the children are 25.

Until they reach that age, Richard and Clara will retain control of the money and use it for the children’s benefit as needs arise. If Roberta should need a larger property to live comfortably with the additional children, this may be arranged. If money were needed for clothes or a holiday, it can be provided. If money is needed for University then that can be given. Richard and Clara will decide whether any particular expenditure is appropriate and may provide the money from the trust fund or not. They may even advance the whole inheritance to any child early if they believe that it is appropriate.

In short, the trustees may approve and provide money from the trust fund for anything that is for a child’s benefit and that they believe worthwhile. Likewise they may refuse money for anything they think might be frivolous or perhaps dangerous.

As each child reaches 25, they will receive their share of the inheritance, and the trust will end.

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Westbury Wills

57 Sylvan Way, Sea Mills, Bristol BS9 2LB United Kingdom
Phone: 0117 907 1002