What is a Trust?
A Trust is an obligation binding a person called a Trustee to deal with property in a particular way for the benefit of one or more beneficiaries. The person creating the trust, known as the Settlor, transfers assets such as money, investments, real property etc to the trust. Assets can also be added later. The Trust Deed directs how the assets held in the trust should be used, and also how any income which may arise should be used.
There are two main types of trusts, which are:
- Interest in Possession Trust- This type of Trust can be created in a Will in favour of the surviving spouse. This will ensure that the whole of the estate will be exempt from Inheritance Tax on first death, and it will also enable 2 full thresholds to be claimed on second death.
- Discretionary Trust- This gives the Trustees complete discretion over the application of Trust capital and income for a range of beneficiaries. Income can also be added to capital rather than paid out if desired.
When might you want to use a Trust?
- When leaving a legacy in a Will or a more substantial inheritance to minor beneficiaries eg children or grandchildren
- To protect assets from the risk of divorce
- To protect assets from the risk of nursing home fees
- To provide for someone who may not be good with money or cannot manage their own affairs, e.g because of incapacity.
- To maintain an element of control over how money is spent and when and/or whether assets are sold or passed on especially in the case of farms and private company shares.
Why Use Gabb and Co?
We have considerable expertise and experience in this field and our specialist and dedicated team can guide you efficiently through the various options which may be available to you. We currently manage over 300 Trusts, and can offer guidance and practical advice, even in cases where we are not the Trustees
- We are rated as one of the top firms in Wales in the “Legal 500” and Chambers Directory for our personal tax, trusts and estate planning service and pride ourselves on offering a first class and cost-effective service.
- We specialise in advising on Inheritance Tax mitigation and where agricultural or business assets are involved we can ensure that you receive the appropriate advice to ensure that any Trust established is fully tax efficient.
Our specialist Team is always on hand to answer any query you may have and you can simply contact us or use our Enquiry Form and we will ensure that a specialist Team member contacts you to discuss any queries/concerns you may have.
post 32 Monk Street, Abergavenny, Monmouthshire NP7 5NW or Old Bank House Beaufort Street Crickhowell NP8 1AD
fax 01873 857589
If you have any general questions at this stage, you can always telephone us and ask to speak to a member of our Private Client Team on 01873 852432 (Dawn Sullivan) or 01873 810629 (Ruth Main).