Call us today 0800 470 0331
Divorce & Family
We are a leading team of Divorce and Family Solicitors with our specialist divorce solicitors providing expert advice about divorce and separation.
Conveyancing Quote
Our property lawyers will explain every step of the conveyancing process, and make it as professional, swift and seamless as possible.
Share article:
Trusts tend to be appropriate where, for one reason or another, assets (such as property or money) are best owned on behalf of someone else. In many cases, this will be because the person who will benefit from the asset is in some way restricted by age or disability.
Bare Trust
The most common type of Trust is known as a “Bare Trust”. These will usually apply where someone under 18 is entitled to the asset and because they are so young the asset has to be held by Trustees for them until they are old enough. Often these will arise from someone’s Will where they may be leaving funds to children – a decision needs to be made as to what age the child should inherit. Broadly, any age between 18 and 25 can be chosen. The Trustees will look after the assets on the child’s behalf and then pass them over when they reach the chosen age.
Life Interest Trust
The next most frequent type of Trust is a “Life Interest Trust”. Again, this tends to arise from someone’s Will. Often rather than leaving a gift outright to someone it is felt better to give them the right to use it during their lifetime, but to ensure that it ultimately passes to another beneficiary. This arrangement is frequently used to help protect part of a house from being used to pay for care home fees. Often someone will leave their half share of the house to their husband or wife for their lifetime but on their death or if they should go into care the share of the house then passes on to their children and cannot be taken by the Local Authority to pay for care fees.
Discretionary Trust
A “Discretionary Trust” is one where there are a number of potential beneficiaries and the Trustees are given a complete discretion as to how and when the funds in the Trust are passed on to them. These are extremely flexible but do have significant tax complications. For example, any income produced by the Trust assets is liable to tax at the highest rate.
Disabled Person’s Trust
Where you are looking to protect someone who has a disability, a “Disabled Person’s Trust” can be ideal. To qualify, the main beneficiary needs to be in receipt of Personal Independence Payments (PIP), Disability Living Allowance (DLA), Attendance Allowance (AA) or be mentally incapable of dealing with their financial affairs. These types of Trust are very useful as they have the same flexibility of a Discretionary Trust but without the tax complications. Funds held on this basis will not affect any entitlement to means tested benefits.
Where to find further help
The above is, of course, only a very brief overview of some of the issues involved. Please contact one of our Private Client Team at Poole Alcock if you would like to discuss these issues further. Call 01270 613939 to arrange an appointment.
Share this article:
Related Insights
Who pays the costs in child custody cases?
The general rule in court proceedings dealing with the arrangements for children
Can a divorcing couple use the same solicitor?
Traditionally, couples that are divorcing have always been told that they cannot
The Importance of Drafting a Will during a Divorce: Ensuring your Legacy ...
Going through a divorce is undoubtedly a challenging and emotionally draining process.
UK Property News: House Prices, Rent and Mortgage Rates
House prices rise at fastest pace since 2004 The average price of
What is a Grant of Probate?
A Grant of Probate (‘Grant’) is a legal document which is often
My loved one can’t make their own decisions anymore – what do ...
Many people rely on their loved ones, whether their family or their
This site is protected by reCAPTCHA and the Google. Privacy Policy and Terms of Service apply.