Advantages Of UK Trust Planning: What Are The Key Benefits?

There is a common misconception that trusts are only relevant to, and used by, the wealthy. However, they are accessible to all and can be a useful tool as part of a wider inheritance tax planning strategy.

There are various reasons why a trust may be set up; some can be written into your Will and others can be set up independently. Here we explain the key benefits of using Trusts as part of your overall financial plans.

ASSET PROTECTION

A Trust provides a robust means of protecting assets. By transferring assets into a Trust, they are legally separated from the individual’s personal ownership, reducing the risk of claims from creditors, lawsuits, or other financial difficulties.

ESTATE PLANNING AND INHERITANCE

Trusts are widely used for efficient estate planning and to ensure a smooth transfer of assets to beneficiaries. By creating a Trust, individuals can specify how their assets should be managed and distributed upon their death, ensuring that their wishes are followed. This can help minimise inheritance tax and avoid lengthy probate processes.

CONTROL AND FLEXIBILITY

Trusts can continue to provide control and flexibility over assets. The individual establishing the Trust, known as the Settlor, can determine the terms, conditions, and timing of asset distributions to beneficiaries. The Settlor can also be one of the Trustees responsible for managing the Trust and the assets held within; this allows for bespoke solutions to meet the specific needs of the Settlor and their beneficiaries.

CONTINUITY & PROBATE

Trusts ensure the continuity of asset management and ongoing support, even in the event of the settlor’s incapacity or death. Assets held within Trust are not subject to Probate, meaning Probate does not have to be granted on death for assets to be distributed as they were intended.

CHARITABLE GIVING

Trusts can facilitate charitable giving by enabling individuals to allocate assets or income to charitable causes. Charitable Trusts provide tax advantages for both the Settlor and the charity, while supporting philanthropic goals.

It is important to note that the advantages of Trusts can vary depending on individual circumstances, the type of Trust, and applicable laws. Seeking professional advice from legal and financial experts is crucial when considering the establishment of a Trust to ensure it aligns with your specific needs and goals.

If you would like some advice on UK Trust Planning, please contact us here.

Articles on this website are offered only for general information and educational purposes. They are not offered as, and do not constitute, financial advice. You should not act or rely on any information contained in this website without first seeking advice from a professional.

Past performance is not a guide to future performance and may not be repeated. Capital is at risk; investments and the income from them can fall as well as rise and investors may not get back the amounts originally invested.