Benefits of a Lifetime Trust?

Find out the benefits of a lifetime trust and how they can protect your assets.

Protection for benefit dependent beneficiaries

Assets inherited by someone that is benefit dependent, will often result in a loss of those benefits. Ultimately the beneficiary is then the Government not your relative.

The Trust protects the assets so that your beneficiary will still qualify for State support. This may be a temporary situation such as unemployment or a more long-term condition such as a congenital birth defect. This is particularly important where the beneficiary has a condition that will prevent them from supporting themselves in the future.

The Trust can provide all of those extras not normally possible when relying on benefits.

Potential Saving: Entire Estate

No Probate Fees or Delays

Probate is required on all estates with assets over £5,000, even when there is a Will.

Probate takes, on average, 6 – 12 months with a Will and 2 years without

Assets are usually frozen on death until Probate is granted. A house owned by the deceased cannot be sold straight away.

Potential Saving: Thousands of Pounds

No Claims on your Estate

The Trust cannot be challenged after 6 years of being set up, so even if a claim is brought against your estate, this will only apply to any assets outside the Trust such as the working capital in your current account. If this is kept to a minimum, claims are normally quickly withdrawn.

Potential Saving: Tens of Thousands of Pounds

No Sideways Disinheritance

Many people are concerned about the effects of remarriage after first death. The Trust allows you to give your new spouse a life interest in your property but ensures it will pass down to your children/grandchildren without the risk of losing the assets to his or her family.

Potential Saving: Entire Estate

Protection from Bankruptcy

If you are in business, and would like to safeguard your personal assets from future unforeseen business debts, the Trust can keep them safe. Although this does not prevent you from being declared bankrupt it can avoid the assets held within the Trust being taken to satisfy the debt.

Potential Saving: Entire Estate

Protection from Inheritance Tax

Assets held within the Trust will not form part of the taxable estate of your beneficiaries. This means that assets held in Trust for the benefit of your son or daughter will not be taxed on their death potentially saving your grandchildren tens of thousands in inheritance tax. Your grandchildren will inherit from your Trust and not from the estate of their parent.

Potential Saving: Tens of Thousands of Pounds

A Side Effect of A Lifetime Trust

A side effect but not a reason to set up the Trust is that assets correctly held within it cannot be taken to pay for your care.

With care fees often costing thousands of pounds per month, many feel that it is unfair to work all their life only to have their home and savings taken away in the last few years.

Benefits of a Lifetime Trust offers effective protection from care fees provided that at the time the assets were protected it was not reasonably foreseeable that you would need to go into care. If you transfer assets into the Trust at a time when you are about to go into care, no harm is done and all of the other benefits of the Trust still apply but the Local Authority may be able to recover some or all of the cost of your care from your Trust.

Potential Saving: Tens of Thousands of Pounds