Trusts

If you’ve already taken the time to make plans for the future you’d like your carefully laid plans to unfold the way you want them to.

This is where trusts come in. They can help make sure the people you care about get the maximum benefit from the plans you’ve made.

A trust is simply a way to give something away with a certain number of strings attached. This gift could be a life assurance plan (including an investment bond), money in a building society account, shares, property… basically anything with value.

Protecting money for children, grandchildren etc

Parents and grandparents can use trusts to provide a protected fund for children or grandchildren and their future expenditure - such as school fees, weddings, cars and houses.

Unfortunately, if you give the money direct to children you cannot be sure about how they will spend the money. By using a trust you can ensure that the money is used for the purposes for which it is intended.

Trusts can be used to protect funds where there is doubt about a child's ability to handle money responsibly or where the child is particularly vulnerable. For example, Trusts can be used to protect funds where a child is:

profligate or careless with money
physically or mentally disabled
dependant upon drugs or alcohol
likely to be involved in divorce proceedings
bankrupt

In effect, such a 'protective trust' is drawn up in such a way as to delay the date at which a child or grandchild becomes entitled to receive the funds. In the meantime more responsible persons (the Trustees) control the money and the use to which it is put.

Inheritance Tax planning

As part of your planning to reduce the amount of Inheritance Tax payable on your death you may be considering giving assets away during your life, so that the value of your estate at your death is reduced.

Perhaps you have an asset that you do not actually need and you may be thinking about giving it away, for tax planning purposes. Normally, when you give property away you cease to have any control over it. By using a trust a you can still maintain a degree of control over the asset.

There are many reasons why you might want to keep a degree of control over property. You may be unsure of how to distribute a gift among several beneficiaries. Their circumstances may change in the future. More children or grandchildren may be born and you may want to include them in your plans.

In cases like these the property can be given to a trust, with instructions to the trustees to apportion the property to the beneficiaries at a future date as they see fit. You specify whom you wish to act as trustees.

Family Businesses

Trusts can be useful for ensuring that family businesses are passed on to future generations. You can create a trust of your company shares and appoint yourself as a trustee. If you are unsure about which of your children will be joining the family business a discretionary trust can be set up to ensure that when the time comes that child can be given a stake in the business.

Landowners

Landowners may wish to ensure that their property is kept intact and in the family. By setting up a trust they can ensure that future generations do not act against their wishes.

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The Techno Centre,
Puma Way, Coventry, CV1 2TT

19 Sherbourne Place,
Clarendon Street, Leamington Spa,
Warwickshire, CV32 5SW

Office Hours:

Monday to Friday 9am to 6.30pm

Communications:

Tel – 0845 0179 578
Fax – 0845 0179 579
Email – office@simpsonfs.co.uk