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Trusts and Asset Protection


Trusts and Asset Protection

Trusts allow for the protection or preservation of assets, allowing them to be set aside for an intended beneficiary and passed on to them at a particular time in the future. Trusts can be used to exempt an asset from long-term care fees assessment. In certain circumstances the family home can be excluded from the probate process (although the value will normally be added on for Inheritance Tax calculations). This can greatly reduce the cost of probate and the time to gather in estate funds. Furthermore, trusts can be used to protect an asset, such as the family home, from those who feel they have a claim on your estate. Whatever your objective, we can provide a trust that does what you need it to.

An Example of Why You Would Need a Trust – Marriage After First Death

In most cases, people want their money and estates to go to their partner and then their children. But even if you have a Will, where you wish for it to go may not actually happen. Here is what could occur:
Following your death, if your partner re-marries, half of everything you left to your partner could be left to their new spouse if they were to divorce. Also, if your partner were to die before their new partner, that person would receive all YOUR assets. This would mean your children receive nothing and are in effect dis-inherited.

We can help you set up a trust that enables your partner to benefit fully from your assets. It also ensures your children’s inheritance is completely protected.

Generational Inheritance Tax

A tax rule you may not know about is that your children may have to pay tax on money that you have already paid tax on. This is a revenue scheme that allows the taxman to tax your money generation after generation.

If you and your partner have traditional mirror Wills your money could be under threat. The first to die leaves everything to the survivor, before passing the estate to your children. Inheritance Tax is due and must be paid by your children – up to a whopping 40% after allowances. When your children pass, their children will have to pay tax as well, and so on.

This can be prevented by setting up a trust in conjunction with your Will, to ensure the taxman only gets one tax payment on your children’s inheritance. This trust can also protect your children’s inheritance from divorce settlements attack by creditors and bypass the probate process.