Why You May Require a Trust
According to research the main reasons why people want to create a trust is to be able control their assets, for example, to prevent children from gaining access to money or property before they are mature enough to handle it safely and effectively. Saving tax was not so important.
As we all know, most families work hard for their property, business and the building up of a particular asset and thus wish to protect these from any future unfortunate relationships, connections, poor business decisions and spendthrifts.
However, it may be that there are no substantial assets, there may be just a reasonable 'nest egg' for the family and parents may wish to safeguard funds to prevent them from being dissipated sooner rather than later.
- You may have a son or daughter who may have an addiction.
- You may wish to protect or preserve your assets so that funds will be available to provide assistance for more than one group of beneficiaries.
- It may be that when you die you want to ensure that funds will be available for your surviving spouse, but also that the funds pass to the child/children if the survivor forms a new relationship.
- You may be concerned if you have a child with learning disabilities who will never be able to manage their own financial affairs.
- It may be that your spouse/partner is financially dependent on you and would need to have access to the trust funds should you die. If capital was given outright to the surviving spouse/partner it could be used for any purpose as they see fit, and the children may not benefit from this. By using a Trust, the income can be released appropriately ensuring that the capital fund is preserved for the children.
- It may be that you have an elderly relative that may require financial assistance with outgoings and will require income to do this but does not require the capital. The capital can then be directed elsewhere upon the demise of the relative.
Some of our clients believe that their children will never learn the value of money and therefore wish to protect their hard-earned savings from their shopaholic children. Unfortunately trusts cannot prevent beneficiaries from making poor choices. They can, however, provide a reasonable hand (in the form of a trustee) to act as a guide or disciplinarian to requests made by beneficiaries for money or other resources.
Trustees are especially important at a time when both parents have died to protect their vulnerable child from potentially unscrupulous friends and carers
There are some parents that have able-bodied children who have sadly chosen the wrong path and have become addicted to drugs or alcohol. They would obviously worry that if they were to inherit a large amount of cash they would endanger their own lives.
Trustees can carry out the parents’ wishes in circumstances where the parents want their assets to be managed by someone so as to provide a roof over their child's head which the child is unable to sell. Small and regular distributions can be provided to the child to meet everyday costs.
For further information or assistance, please contact us via:
Telephone: (01529) 306005 or