Creating a Trust is a safe and secure way of managing your estate so that it is distributed accordingly when you die. A Trust is however a flexible arrangement that relies on the decisions of those whom you trust to deal with your estate in a manner that you would agree to.
A Trust is normally created for larger assets such as property, business or sizeable investment portfolios. The role of the Trustee is not to control or use the assets, rather to ensure that the best possible value is realised and is thus passed along to the beneficiaries at the appropriate time. It may be the case that it is not profitable for assets to be passed immediately to the beneficiaries. Or there may even be a group of potential beneficiaries and the trustee will need time in order to establish who is the most deserving.
A certain amount of tax planning can be done when making a Trust. Tax planning is a crucial way of preserving your wealth for your beneficiaries and getting the best out of your assets when you die. An experienced tax & probate solicitor will be able to advise you on what legitimate methods to use in managing your wealth that will protect it from the effects of income, capital gains and inheritance tax.
The importance of making a Will
Changes in society have meant that people's families are larger and more diverse then ever before. To avoid any complication and confusion a Will should be drafted which deals with all the assets in your estate when you die. A shockingly high percentage of people in the UK still do not have a Will - most research indicates that well over 70% of people without a current up-to-date will. Dying without a will means that your estate will be subject to the intestacy rules and where the deceased's family cannot be located assets are still referred back to the Crown. Further to this, if your Will is badly drafted for example a DIY Will and it is also not updated, it may leave your estate open to inheritance claims or disputes over your Will.
The consequences of not having a Will can effect those whom you would assume would benefit from your estate, but legally do not i.e. unmarried partners. Conversely you may wish for your estate to only go to your children not your newly married spouse, but they would take half of the estate when you die without a Will.
Your Will should be drafted by a specialist probate solicitor and then should be kept updated on a yearly to two yearly basis. This will enable your solicitor to update your will in line with any changes in tax legislation or the law in general. Not only this, but your circumstances may have changed over time and who you would want to benefit from your Will may differ. Not only this, but your financial status changes over time which should be shown in the Will.
A solicitor will have drafted your Will in such as way that when it comes to winding up your estate, your beneficiaries will get the best return they can. In light of the increasing property prices and decreasing tax thresholds a well drafted Will could help prevent them from paying unnecessary inheritance tax.