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Estate & Trust Planning


There is a wide range of Trusts available within the realms of estate planning, and it is important to ensure that you speak to an experienced legal adviser to ensure that any Trust you may establish is the right one for your specific circumstances.  Trusts are very complex and it could have a drastic affect on your estate planning if Trust is set up incorrectly or the wrong one is chosen.

Eversley Legal Services Limited can advise on a wide range of specific Trusts and have the ability to create bespoke Trusts, if your particular circumstances require this.

One of the most popular Trusts is the Family Asset Protection Trust.

What is a Family Asset Protection Trust?
In order to retain control over your assets and at the same time to preserve them for your children and future generations, you can put assets into a Family Asset Protection Trust (FAPT). This will mean that the assets are ‘ring-fenced’ from potential problems.

The purpose of the Trust is to preserve and protect assets not to mitigate or avoid inheritance tax.

Why should I create a Family Asset Protection Trust?
There are many potential problems if your assets are not ring-fenced. Creating a FAPT will avoid the following:

Third parties making claims against the estate once the client has died
If most of the assets are held in trust, then there will be little in the Estate to argue about and this should mean it would not be worthwhile for anyone to contest the Will or intestacy.

Beneficiary’s creditors/trustee in bankruptcy receiving assets intended for the beneficiary
A Discretionary Trust enables the Trustees to withhold payments to a beneficiary with financial problems until such time as the financial issues are resolved and monies paid to the beneficiary can be enjoyed absolutely by him/her.

Beneficiaries not using the money inherited properly because they are feckless or have mental health problems or addictions which adversely affect financial skills
It can be useful to have a Discretionary Trust (as in bankruptcy above) so that the Trustees only pay out when the money is likely to be used properly by a beneficiary. 

Beneficiaries on means tested benefits who may receive reduced benefits once the amount they inherit is
declared to the DWP

Again, a Discretionary Trust means the Trustees could keep any payments to the beneficiary limited to preserve benefits.  Alternatively, a life interest trust may mean that income payments are sufficiently low to retain payment of the benefits.  A power of appointment for the Trustees to pay income or part of it to another person if the income were too high for benefit purposes could be incorporated. 

The Local Authority selling your house to pay for your Care Fees

A Trust cannot be counted by the Local Authority in assessing client’s means.  However, if the sole or primary reason for setting up the Trust was to avoid paying care fees and particular if a short period of time elapses between setting up the Trust and receiving care, the local authority can challenge the Trust and potentially have it set aside.  Unfortunately, neither Statute nor Case Law define what particular period of time needs to elapse between the establishment of the Trust and going into care, so no guarantees can be given to clients that a Trust would be successful for this purpose. However, the greater the time period between the two events, the less likely the Trust could be challenged and providing there is at least one other good reason for establishing the Trust, it is unlikely to be subject to a successful challenge.

Saving on Administration and Costs on Death

If there is little in the Estate on death, even if there are considerable assets held in Trust, it may not be necessary to obtain a Grant of Representation on death to administer the Free Estate; or at least any Grant and administration are likely to be quicker and cheaper than without the Trust(s). 

“Skipping” the Generations
Where the Testator’s children are financially secure, the Testator may wish to set up a lifetime Trust benefiting the grandchildren, but keeping control of how the assets are distributed until the grandchildren each reach adulthood.  This may save the necessity and expense of a Deed of Family Arrangement after the Settlor/Testator’s death.If you would like to discuss Trusts and estate planning in greater detail, please do not hesitate to contact us or alternatively, please visit the Eversley Legal Services website – www.eversleylegalservices.co.uk

 
 

 
     
     
 
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