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Trusts

When you pass away, a Trust within your Will ensures that your estate is looked after in the way you intended and given to the correct people at the right time.

 

A Trust is additional legal wording within your Will which enables your estate to be safeguarded for your beneficiaries after your death. Assets like your property or money can be secured for a particular purpose and time, such as until a beneficiary is old enough to inherit.

Key features

A Trust protects the beneficiary against hostile creditors, for example in the case of

  • Divorce – any funds left in Trust cannot be taken into account as part of a divorce settlement
  • Bankruptcy – funds left in the Trust are not liable to be surrendered as part of asset liquidation in bankruptcy proceedings
 

A Trust can also be used to

  • Avoid paying inheritance tax twice - e.g. By leaving funds in Trust to a grandchild, it will bypass the estate of your child. By bypassing the middle generation, you could potentially take away the need for your grandchild to pay inheritance tax on the estate of your child
  • Make provision for a beneficiary who is unable to look after their own assets
 

Here at Key, we offer two main types of Trust; Interest in Property Trust and Discretionary Will Trust. The first enables you to protect your property. The second enables you to have more control over your assets after you have passed away.

Interest in Property Trusts

This Trust safeguards your partner by changing the way you own your house. Each partner will own a proportion of its value, rather than both owning 100% of the property together.

Each partner will then be able to bequest their percentage of the property as they see fit – safeguarding some of your loved-ones inheritance, but still enabling your partner to remain in the property even if you leave your share to someone else.

Suitable for many people, including:

  • Mature couples who are concerned about losing their property under the terms of the Community Care Act 1990
  • Families where one or both partners have children from a previous relationship
  • Couples where there is a significant age difference between partners
  • Couples who individually wish to ensure the inheritance of their children or other beneficiaries, without forcing their partner to sell their home

Discretionary Will Trust

This Trust enables you to provide for loved ones after you’ve passed away. You nominate two trustees to manage the trust fund and leave specific instructions as to how and when the money is to be used for each beneficiary.

You can request for the money to be spread out over a period of time, or paid at a particular time, for example, an eighteenth birthday.

Suitable for many people, including

  • People who have a beneficiary who is a minor
  • People who want ensure a disabled relative is adequately provided for
  • People wishing to mitigate a potential Inheritance Tax (IHT) liability

You have a right to protect your assets

Every individual is permitted to organise their affairs to ensure they bear the smallest financial burden, should they or their partner require long-term care.

These pages give a general overview of the issues surrounding estate planning and are based on our understanding of the current law and tax regulation in England and Wales, which may be subject to change.

Key promise

Customer satisfaction is at the heart of everything we do; we pride ourselves on being independent, transparent, supportive and straightforward. We're passionate about helping you to make the most of your finances when you’re in or approaching retirement.

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