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Trusts

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A trust allows someone to pass assets on to their chosen beneficiaries whilst retaining control over the assets within the trust. They can typically be used for money, investments, land or buildings.

What is a trust?

A trust allows someone to pass assets on to their chosen beneficiaries whilst retaining control over the assets within the trust. They can typically be used for money, investments, land or buildings.

A letter of wishes is generally prepared to give guidance to the trustees regarding how the trust is to be managed and the circumstances in which capital and income can be advanced to a beneficiary.

How does a trust work?

This depends on the type of trust, the beneficiary may receive a fixed interest, such as a right to occupy a house or a right to income, but it may be discretionary.

If a beneficiary’s interest is at the discretion of the trustees, it means the beneficiaries of a trust are generally not automatically entitled to receive anything. Rather, income and capital can be paid out to them if the trustees agree to do so.

A trust deed is created, outlining the parties involved and the purpose of the trust. A letter of wishes is also prepared to give guidance to the trustees regarding how the trust is to be managed and the circumstances in which capital and income can be advanced to a beneficiary.

Assets are then transferred as necessary and the trust registered with HMRC.

Who is involved with a trust?

There are typically three parties in a trust:

  • The ‘settlor’ – the person/people who puts assets into a trust.
  • The ‘trustees’ – the people who manage the trust.
  • The ‘beneficiary’ – the person who benefits from the trust.

Lifetime Trusts/Settlements

A lifetime trust can be a useful estate planning tool by making use of the rules for gifts to reduce the size of the settlor’s estate for inheritance tax purposes.

For example, if a settlor no longer financially needs to own a second home, they can put it in trust in their lifetime. If they survive seven years from the day on which the property was transferred to the trust, it should fall outside of their estate for inheritance tax purposes. This will mean that the value of the house will not be included when calculating the size of the settlor’s estate once they have died, thereby reducing their inheritance tax liability.

When is a lifetime trust used?

  • For estate planning in lifetime to reduce an inheritance tax liability.
  • Where there is a beneficiary who cannot manage their affairs, due to incapacity or being under the age of 18.
  • To preserve assets within a family.
  • To pass on assets when you die via a Will.

Discretionary Trusts

A discretionary trust can be made in lifetime or via a Will.

A class of beneficiaries is included within the trust, such as children or grandchildren. The effect is that no beneficiary is entitled to receive anything but rather the trustees decide when income and capital should be advanced to them. It is advisable for a letter of wishes to be prepared to guide the trustees on the circumstances and situations in which monies can be advanced.

When is a discretionary trust used?

  • For estate planning in lifetime to reduce an inheritance tax liability.
  • Where there is a beneficiary who cannot manage their affairs, due to incapacity or being under the age of 18.
  • To preserve assets within a family.
  • To keep the distribution of an estate/asset flexible.
  • To retain control over the assets held in trust.
  • To pass on assets when you die via a Will.

How does a Discretionary trust work?

A discretionary trust means the beneficiaries of a trust are generally not automatically entitled to receive anything. Rather, income and capital can be paid out to them if the trustees agree to do so.

It is incredibly important that the trustees who are appointed are reliable and that the settlor trusts them implicitly.

A trust deed is created, outlining the parties involved and the purpose of the trust. A letter of wishes is also prepared to give guidance to the trustees regarding how the trust is to be managed and the circumstances in which capital and income can be advanced to a beneficiary.

Assets are then transferred as necessary and the trust registered with HMRC.

Life Interest Trust

A Life Interest trust is made via a Will.

Such a trust is particularly useful in the case of second marriages and blended families. For example, it allows the testator to allow their current spouse to live in a property for their lifetime and when the spouse passes away, the property reverts to the children of the testator. This still makes use of the inheritance tax advantages that are applied to such estates, whilst ensuring that the property does not pass via the Will of the current spouse.

This would be the case without the life interest trust, because the asset would be passed outright to the current spouse and consequently be passed on via their Will when they die.

When is a life interest trust used?

  • Estate planning in Wills to reduce an inheritance tax liability.
  • Where there is a beneficiary who cannot manage their affairs, due to incapacity or being under the age of 18.
  • To preserve assets within a family.
  • To pass on assets when you die via a Will.
  • To provide for a spouse yet ringfence assets for children.

How does a life interest trust work?

The beneficiary may receive a fixed interest, such as a right to occupy a house and/or a right to income.

A trust is created within a Will, outlining the parties involved and the purpose of the trust. A letter of wishes is also prepared to give guidance to the trustees regarding how the trust is to be managed and the circumstances in which capital can be advanced to a beneficiary if required.

Assets are then transferred on death and the trust registered with HMRC.

Disabled Child Trust

A Disabled Child trust would generally be made via a Will.

Such a trust would be applicable whereby a testator wishes to leave money to a disabled child. It is a specific type of trust set up for a person who falls within the legal definition of “disabled”.

Such a trust ensures that the beneficiary is protected from financial abuse and is also taxed more favourably than other types of trust.

When is a disabled trust used?

  • Where there is a beneficiary who cannot manage their affairs, due to incapacity.
  • To preserve assets for the disabled child.
  • To pass on assets when you die via a Will.

How does a disabled child trust work?

The trustees decide how the funds within the trust are used to benefit the disabled child. It should mean that their means-tested benefits are not affected.

A trust deed is created, outlining the parties involved and the purpose of the trust. A letter of wishes is also prepared to give guidance to the trustees regarding how the trust is to be managed and the circumstances in which capital and income can be advanced to a beneficiary.

Assets are then transferred as necessary and the trust registered with HMRC.

How does the process work?

You are invited to a meeting to discuss your wishes which we can conduct via video conferencing. We are equally happy to discuss matters over the telephone or by email. Alternatively, we can meet at our office or your home, if that is more convenient for you.

We shall draft the trust deed or Will trust in accordance with your requirements and send it to you with a full letter of advice. Once you are happy, it can be prepared ready for signature and the settlor and trustees will need to sign it. We are able to store trust deeds in our firm’s storage facility for safekeeping, which we do at no extra cost and we will also provide a signed photocopy for your own records.

How long is the legal process?

We normally aim to send a draft trust deed or Will trust to you within a fortnight of our initial meeting but if there is particular urgency, we can prepare the document more quickly.

Is it expensive?

We are usually able to provide a fixed fee service for the drafting of most trust deeds and any consequent work, such as the transfer of assets. Please call us on 020 8858 6971 or email [email protected] for a quotation.

What are the things people should consider before calling?

You should consider the following:

  • Who you would like to appoint as your trustees. That is the person(s) appointed to manage the trust. The Partners at Grant Saw can be appointed as trustees, if required.
  • Who the beneficiaries of the trust will be and the circumstances in which monies can be advanced to them.
  • It would also be helpful if you could provide us with a rough estimate of the value of your assets so that we can provide you with any relevant inheritance tax advice.

Why are Grant Saw the best people for the job?

We are the largest private client department in the local area and have a number of dedicated specialists in the team. As a department, we pride ourselves on providing excellent client service, with a friendly and approachable manner and we are frequently instructed by new clients based on recommendations received from our existing clients. We also hold the Law society accreditation for excellence in Wills and Probate, known as WIQS (Wills and Inheritance Quality Scheme), as well as having members of Solicitors for the Elderly and STEP in the team. These are all demonstrative of the expertise and dedication our lawyers have in making sure our clients receive the best advice possible.

Solicitor Firm of the Year

Meet the Trusts team
Ray Crudgington
Managing Partner
greenwich
02083054224
ray.crudgington@grantsaw.co.uk
Maria Lati
Partner
Head of Residential Property
blackheath
02083054229
maria.lati@grantsaw.co.uk
Mike Clary
Partner
Head of Family
greenwich
02083054237
mike.clary@grantsaw.co.uk
Kalpa Prajapati
Partner
Head of Private Client
blackheath
02083053536
kalpa.prajapati@grantsaw.co.uk
Mario Savvides
Partner
Head of Commercial Property
greenwich
02083053531
mario.savvides@grantsaw.co.uk
Sarah-Kate Jackson
Partner
Head of Litigation
greenwich
02083054236
sarah-kate.jackson@grantsaw.co.uk
Adina-Leigh Collins
Litigation
Solicitor
greenwich
02083053556
adina-leigh.collins@grantsaw.co.uk
Aimal Gram
Commercial Property
Solicitor
greenwich
02083053524
aimal.gram@grantsaw.co.uk
Aisha Mohammed
Residential Property
Solicitor
greenwich
02083054228
aisha.mohammed@grantsaw.co.uk
Aishat Balogun
Aishat Balogun
Family
Solicitor
greenwich
02083054214
aishat.balogun@grantsaw.co.uk
An Le Tran
Commercial Property
Professional Support Solicitor
greenwich
02083054226
anle.tran@grantsaw.co.uk
Angus Young
Litigation
Solicitor
greenwich
02083054225
angus.young@grantsaw.co.uk
Atifha Aftab
Atifha Aftab
Family
Solicitor
greenwich
02083054238
atifha.aftab@grantsaw.co.uk
Bimal Kotecha
Litigation
Solicitor
greenwich
02083053523
bimal.kotecha@grantsaw.co.uk
Charlotte Mandy
Charlotte Warren
Private Client
Solicitor
blackheath
02083054231
charlotte.warren@grantsaw.co.uk
Claire Mac Mahon
Litigation
Solicitor
greenwich
02083053537
claire.macmahon@grantsaw.co.uk
Deborah Taite
Residential Property
Solicitor
blackheath
02083053542
deborah.taite@grantsaw.co.uk
Emily Pearce
Residential Property
Solicitor
greenwich
02083053526
emily.pearce@grantsaw.co.uk
Georgia Beales
Litigation
Paralegal
greenwich
02083054206
georgia.beales@grantsaw.co.uk
James McKimm
James McKimm
Corporate and Commercial
Solicitor
greenwich
02083054217
james.mckimm@grantsaw.co.uk
Jeremy Brooks
Jeremy Brooks
Private Client
Solicitor
blackheath
02083053534
jeremy.brooks@grantsaw.co.uk
Joanna Godden
Notary Public
Notary
greenwich
02083083535
joanna.godden@grantsaw.co.uk
Kim Whitaker
Kim Whitaker
Corporate and Commercial
Head of Corporate and Commercial
greenwich
02083053539
kim.whitaker@grantsaw.co.uk
Laura Danquah
Compliance Manager
greenwich
02083054222
laura.danquah@grantsaw.co.uk
Lauren Smith
Employment and Family
Paralegal
greenwich
02083053543
lauren.smith@grantsaw.co.uk
Mandeep Clair
Family
Solicitor
greenwich
02083054235
mandeep.clair@grantsaw.co.uk
Michael Pope
Employment
Consultant Solicitor
greenwich
02083053540
michael.pope@grantsaw.co.uk
Michelle Pinnington
Michelle Pinnington
Residential Property
Solicitor
greenwich
02083054216
michelle.pinnington@grantsaw.co.uk
Noella Gooden
Employment
Solicitor (Australian qualified)
greenwich
02083053543
noella.gooden@grantsaw.co.uk
Raj Waghela
Raj Waghela
Residential Property
Solicitor
greenwich
02083053529
raj.waghela@grantsaw.co.uk
Randeep Thethy
Randeep Thethy
Residential Property
Solicitor
greenwich
02083054209
randeep.thethy@grantsaw.co.uk
Ruggero Pesciatini
Ruggero Pesciatini
Corporate and Commercial
Paralegal
greenwich
02083054220
ruggero.pesciatini@grantsaw.co.uk
Sarah Conner
Sarah Conner
Private Client
Solicitor
blackheath
02083054234
sarah.conner@grantsaw.co.uk
Simran Lalli
Simran Lalli
Employment
Solicitor
greenwich
02083054208
simran.lalli@grantsaw.co.uk
Susan Collins
Commercial Property
Solicitor
greenwich
02083054200
susan.collins@grantsaw.co.uk
Tatiana Zenina
Tatiana Zenina
Private Client
Solicitor
blackheath
02083054239
tatiana.zenina@grantsaw.co.uk
Trisha Djemal
Trisha Djemal
Residential Property
Consultant Solicitor
blackheath
02083053546
trisha.djemal@grantsaw.co.uk
Tyrone Grant
Residential Property
Head of Leasehold Enfranchisement
blackheath
02083053522
tyrone.grant@grantsaw.co.uk
Denise
Accounts Staff
greenwich
02088586971
enquiries@grantsaw.co.uk
Jayne Lye
Support Staff
Office Manager
greenwich
02083054204
jayne.lye@grantsaw.co.uk
Jamie
Support Staff
Head of IT
greenwich
02088586971
enquiries@grantsaw.co.uk
Kasia
Accounts Staff
greenwich
02088586971
enquiries@grantsaw.co.uk
Michael Tobin
Michael Tobin
Support Staff
Marketing and Business Development Manager
greenwich
02083053550
michael.tobin@grantsaw.co.uk
Sue Holness
Support Staff
Customer Services
greenwich
02083054221
sue.holness@grantsaw.co.uk