What you need to know about Will Trusts….
Writing our Will is something that we all know we should do but for many reasons just don’t seem to get round to it.
Dying without a Will means that your estate will be distributed in accordance with the Governments prescribed rules of intestacy. But, by writing your Will you are in control of how your assets are shared out, who benefits from your estate and by how much.
However, a standard Will only takes care of assets that are SOLELY owned by you. Many people fail to think about is, what will happen to their share of any jointly owned assets once they have gone. When you consider that the assets that we own jointly are typically our most valuable this could be an expensive oversight for your beneficiaries. This is where a Will Trust comes in.
The two types of Will Trusts
- Asset Driven; these trusts safeguard your share of a jointly owned asset being passed to someone you wouldn’t want it to go and,
- Beneficiary driven; this type of trust is used to protect vulnerable people. Members of your family you wouldn’t necessarily want to inherit a large sum of money.
What can a Will trust protect against?
Threats to your assets
Once someone has total ownership of an asset they are at liberty to dispose of at as they wish. By putting a Will trust in place legal ownership DOES NOT pass to your spouse therefore, ensuring your chosen beneficiaries inherit what you would want them to.
Families are complex these days, by allowing ownership to simply pass along poses significant risk of disinheritance for children from previous relationships – these include:
Marriage voids any Will and if a surviving partner remarries and forgets to write a new one ALL their assets will go to their new spouse. The children of their late partner receive nothing.
The surviving partner remarries and, having never liked her step children, simply writes a new Will cutting them out completely. As they are not blood relatives they are not, legally, entitled to anything.
Over time people drift, and a surviving spouse may find they lose contact with their late partner’s children. In this instance you may forget to, or simply decide not to, name them in their new Will, they will again receive nothing.
If the surviving partner is made bankrupt the asset – including your share, will be taken.
A surviving partner remarries and subsequently divorces your share of the asset ends up as part of the divorce settlement.
By establishing a trust over the property means that the share in trust cannot be taken into account by a local authority to pay the survivor’s care fees. However, the whole property could be taken into account if you both enter residential care accommodation. It’s worth noting here that placing a property in it’s entirety into Trust in a bid to avoid care fees will be considered a deliberate deprivation of assets and your local authority will take it anyway.
Threats to your Beneficiaries
There are two different trusts you can use to protect your beneficiaries. Firstly– a Disabled persons trust can be put in place to safeguard anyone that is registered disabled. The advantage of this is that it will allow them to retain any disability benefits that they may receive. Or, if the beneficiary in question is young and/or vulnerable, someone that you wouldn’t want to inherit a large amount of money or a property you can put a Discretionary trust in place. Both trusts protect your beneficiaries against being taken advantage of, selling the assets and squandering the money.
Nil Rate Band Discretionary Trusts
These trusts were very popular in the 1980’s are now out of date and could mean your beneficiaries are left with a hefty and largely avoidable Inheritance Tax Bill.
A Will trust adds another layer of security for your beneficiaries. They are incredibly simple to set up and you will not be required to do anything legal they are just written into your Will and come into effect when you die.
Future Legal Services are currently offering Silversurfers 15% discount on Will writing – this offer includes single and mirror Wills. We also offer a number of different trust options and you can include one or more trust(s) in your Will for a flat fee of just £199
Latest posts by Sally - Silversurfer's Editor (see all)
- Would you be happy sharing your local woodland with top predators? - July 18, 2019
- 6 common suncare mistakes not to make this summer - July 15, 2019
- Thai Fragrant Coconut King Prawn Curry - July 15, 2019
- I’m Over 50, so what are my Life Insurance options? - July 15, 2019
- Do you have this common digestive disorder? - July 12, 2019
Leave a Comment!
Community Terms & Conditions
These content standards apply to any and all material which you contribute to our site (contributions), and to any interactive services associated with it.
You must comply with the spirit of the following standards as well as the letter. The standards apply to each part of any contribution as well as to its whole.
be accurate (where they state facts); be genuinely held (where they state opinions); and comply with applicable law in the UK and in any country from which they are posted.
Contributions must not:
contain any material which is defamatory of any person; or contain any material which is obscene, offensive, hateful or inflammatory; or promote sexually explicit material; or promote violence; promote discrimination based on race, sex, religion, nationality, disability, sexual orientation or age; or infringe any copyright, database right or trade mark of any other person; or be likely to deceive any person; or be made in breach of any legal duty owed to a third party, such as a contractual duty or a duty of confidence; or promote any illegal activity; or be threatening, abuse or invade another’s privacy, or cause annoyance, inconvenience or needless anxiety; or be likely to harass, upset, embarrass, alarm or annoy any other person; or be used to impersonate any person, or to misrepresent your identity or affiliation with any person; or give the impression that they emanate from us, if this is not the case; or advocate, promote or assist any unlawful act such as (by way of example only) copyright infringement or computer misuse.
Nurturing a safe environment
Our Silversurfers community is designed to foster friendships, based on trust, honesty, integrity and loyalty and is underpinned by these values.
We don't tolerate swearing, and reserve the right to remove any posts which we feel may offend others... let's keep it friendly!