Lowes Inheritance Guide

LOWES INHERITANCE GUIDE

4 Trusts

Putting money or property in a trust involves using a legal instrument to attach certain conditions to the assets. It can be an excellent way to reduce a future inheritance tax bill, however, trusts are sometimes complex and therefore it is essential to take professional advice.

A trust involves giving property (which can be cash, investments or property) to someone to look after on behalf of someone else. They require a donor (the person making the gift into the trust), a trustee (responsible for managing the trust properly), and a beneficiary (who ultimately benefits from the money in the trust). When you put money into a trust, it no longer belongs to you, which means it usually doesn’t count towards the value of your estate for future inheritance tax purposes. Trusts are also a very effective way to keep control of wealth, for the chosen beneficiary or beneficiaries. It places a legal obligation on the trustees to look after the assets in the trust for the person or people who will ultimately benefit.

In addition to the tax efficiency that can be obtained by using a trust, they are also instrumental in making sure any money goes to the intended recipient. A good example is where the money is left to an adult child who is married at the time, but subsequently separates from their partner. If money is left to them in trust, it can be kept out of any financial settlement on divorce, ensuring it stays within the family as intended. There are several different types of trust, and the most suitable type for your inheritance tax planning will, of course, depend on your circumstances, goals and objectives. This is where specialist advice from a Lowes Adviser is vital, so you choose the best possible trust arrangement as part of your broader inheritance tax planning.

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