A trust can be useful if a person wants to give away property on death but does not want the recipient to own it. Property can be given by will to trustees, who hold it on specific terms and conditions - this arrangement creates a trust.
The executors of a will are responsible for implementing this and will become the trustees of it. A trust may be used to provide a tax benefit, or as a vehicle for effecting the wishes of a person who does not want to give property to someone outright (for example, if that person is under 18 or unable to manage their affairs due to mental incapacity) or wants to ensure that beneficiaries receive benefits at different times.
One form of trust commonly used on death is called a life interest trust. This will allow the benefit of any income or the right to live in a house to be given to one person, but they will not own the capital interest. This is ideal where a person wishes to benefit a second spouse until their death but also ensure some or all of their property passes to the children of the first marriage. Trustees have particular responsibilities and there are rules and income and inheritance tax implications, so care must be taken at the outset and professional advice sought to administer the trust correctly and ensure there will be no large or unexpected tax bills.
Contact Helen Girton, one of our private client solicitors on 01983 524741 for more support and advice.
A trust can be useful if a person wants to give away property on death but does not want the recipient to own it.