Trusts; how you can control your money from beyond the grave

Do you ever wonder what might happen to your assets after you've passed away? Are you certain that things will work out for the best and that your relatives will look back in future years and thank you for everything you did for them?

The truth is that quite often things do not go according to plan. And as counter-intuitive as it may seem, there are many occasions when being left a large sum of money can cause as many problems as it solves.

This is why people who understand money enough to take it seriously are far more likely to go the extra mile for their relatives, and make use of Trusts in their Will.In simple terms a Trust is a legal arrangement that allows you to appoint one or more people – known as the trustees - to look after your assets on behalf of your beneficiaries.

Who benefits from a Trust?

Often parents are the ones who benefit most from Trusts, simply through peace of mind. This is because they stop children from inheriting at too early an age and even allow the Trust to govern what the money is used for.

So if your child was to inherit a sum on their 21st birthday – say £20,000 – it would be possible to stipulate that that money only be used for their education. This could be the difference between them entering their mid-twenties with a master’s degree or a serious drink problem.

A Trust can also protect your assets for your children if your partner remarries. This is because there is always a danger that if your partner then passes too, and has not made an adequate Will, then your estate will pass completely into the hands of this new person, leaving your children excluded and disinherited.

When you look at it like this, there is an argument to say that not making use of Trusts is totally reckless from a parental point of view.

Trusts are also a great way of protecting assets for vulnerable beneficiaries. If you have a relative with a disability, who receives a means tested benefit or is in receipt of social care, you could leave money in a Trust without it potentially impacting on their delicate finances.

This could allow provision for things like occasional new furniture or an annual holiday.

Many older people create Trusts to protect their homes from being sold, should one of them have to go into long-term care.  

However, this can be interpreted as avoidance by your Local Authority so seek professional advice before embarking along this route.

Business Trusts for the self-employed

As more and more of us become self-employed, having a business trust becomes an essential part of planning for any well-run company.

Should anything happen to you while you are still working, your business could find itself in a very vulnerable position.

A Business Trust could allow people chosen by you – your ‘trustees’- to oversee the business on your family’s behalf until they are either able to sell, or until its value is realised.

Keep control of your finances

Trusts are the very best tool that we have in making sure that our money passes into the right hands and that it is used for the right reasons.

They allow us to keep a degree of control from beyond the grave, making sure that we continue to do our best for our families, even if we can no longer be there for them in the physical sense.

To find out more about Trusts and speak to a member of our Wills and Probate team, contact us today on 0800 29 88 66 1