Bloodline planning: an introduction to Trusts

Have you thought about writing your Will? Looking after loved ones is a priority for most people. But could your estate be at risk if it’s left in an ordinary bank account? Our blog explains the benefits of leaving assets in Trust…

If you’ve thought about writing your Will, you may have wondered how to ensure that your assets go to the people you love. Perhaps you’re concerned that the legacy you leave could end up in the hands of HMRC, your children’s partners or creditors?

Trusts are an effective way to protect your assets for future generations, so you can ensure that your estate is left to your bloodline.  

Vulnerabilities of inheritance

If your estate is cashed out to an ordinary bank account, the money is not protected. In certain scenarios, this could put your legacy at risk. For example:  

• Taxation – your estate may be subject to inheritance tax (IHT)

• Divorce – of your children or grandchildren

• Creditors or bankruptcy proceedings – if your beneficiaries find themselves in this position in future

The benefits of a Trust

Trusts protect assets from undesirable parties. In a general bank account, cash could be accessed by partners, subject to divorce or separation agreements. Trusts mean that only the beneficiaries can receive money held in trust.  

This also protects it from creditors and IHT. It prevents that money being counted as part of any means-tested benefits too.

A Trust doesn’t just apply to cash, either. Property and investments can be held in Trust as well.

Who might consider a Trust?

Anyone can consider a trust, though they may be particularly beneficial for the following people:

• People who have remarried – in the event of a parent remarrying, the new spouse supplants any children when it comes to inheritance.

• Those with young children – if you have children, you might consider a Trust so you can rest assured that your legacy is being managed responsibly by the Trustees, until your children are old enough to manage the assets.

• People with partners or children who have a disability – if your loved one requires care, you may worry how they’ll be taken care of in the event of your death. Money in Trust is excluded from means-tested benefits, meaning that the money they need to live is protected from being used to pay for their care.

• Business owners – if you’ve worked hard to provide for your family, don’t leave things to chance. Keep it in the family and protect your legacy from external parties in a Trust.

• Those making a Will whose partner could remarry in future – if your partner remarries, the inheritance you leave to them now would go to the new spouse in future. If you’re determined to leave a legacy for your children, a Trust enables you to do this.

Don’t leave your legacy to chance – consider a Trust when you make a Will

It’s always a good idea to take professional advice before making decisions relating to your estate. If you’re concerned about protecting your legacy for future generations, get in touch. We’re on 0117 2795507 and happy to answer any questions you have. There’s no obligation; our only intention is to help you protect the people you love as you wish.

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