The Will Writer Group Ltd. is an appointed representative of New Leaf (WWF) Ltd. 
Our head office address is 26 Priestgate, Peterborough, PE1 1 WG.

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TRUST AND ESTATE PLANNING

- Learn more from the friendly Will Writer Group -

The creation of family trusts have been used by the rich and wealthy for hundreds of years to help protect family wealth and ensure it remains within their family. Today, these trusts are being used by more people and are no longer the preserve of the rich and famous but they can be valuable and yet affordable documents.


The attraction for creating a family trust is that it can help mitigate any need for probate, so you will save your estate thousands of pounds in charges, and also avoid the potential threats that may occur when you want to pass your wealth down the generations and who you choose to be beneficiaries.

It’s for this reason that estate planning is an important process that puts you in control of your assets and where they end up. A trust is also an important vehicle to help shelter your property and other assets from means tested benefits which will include those for long-term care. The rules are complicated and change frequently so you must ensure that your estate planning will comply with current and potential future rules.

For all aspects of trusts and estate planning, speak with the friendly team at the Will Writers Group.

Home Ownership and Trusts –

As part of writing your will you may wish to deal with the issue of your partner or spouse continuing to live in a property you own. However, the executor of your estate will need to know whether the property was owned as ‘tenants in common’ or as ‘joint tenants’.


This is an important distinction to make because there different rules applicable to each.

  • Joint tenants: If your property is owned as ‘joint tenants’ with your spouse or partner, then the ‘rule of survivorship’ will apply. This means that when one of the co-owners dies, the survivor(s) will automatically inherit their share equally regardless of what the Will states, or indeed what the ‘intestacy rules’ state.

  • Tenants in common: The big difference when buying a property with a partner or spouse and who are not ‘joint tenants’ but are deemed as ‘tenants in common’ then the rule of survivorship is not applied. So, when one of the co-owners dies the provisions of their Will, or in the case of having no Will then the ‘rules of intestacy’, will determine what should happen to their share of the property. However, for some couples being ‘tenants in common’ is more beneficial since the deceased could leave their share of the property to their beneficiaries in trust instead of their spouse though they may also have a trust created that is either a ‘life interest’ or ‘right to reside’ so the surviving spouse or partner will not lose their home.

 

For most people buying property, they will do so as joint tenants. This is an important distinction but many may not realise how important until it is too late. For example, the Office for National Statistics says that the number of unmarried couples living together in the UK has doubled from 1996’s figure of 1.5million to 3.3million today – that’s around 17% of all families. When buying a home make the distinction and put this in your Will.

The benefits of using a trust can protect your half of what is usually your biggest asset from future marriages and creditors to offer a guarantee your children inherit your home. It is also important that when estate planning that any advice being sought is in the best interest of the client. The Will Writing Group will have more information.

Basic Property Protection Trust...

When writing your Will, it is possible to create trusts of various kinds and for some a property protection trust will prove beneficial. The trust is a way of managing or holding money or assets safely on behalf of your beneficiaries.
A property protection trust is an ideal way for couples who live in England and Wales to protect at least half the value of their family home and ensure it is passed onto their children.


This is done by writing a Will which puts half of the family home’s value into a property protection trust when the first spouse or civil partner dies.


Under the terms of the trust, the surviving spouse or civil partner can then continue living in the property that is held within the trust. Also, the home’s value is also ring-fenced so should the surviving spouse move into a residential care home, the amount ring-fenced is not part of the financial assessment for deducting the care home fees.


Essentially, the home is held in part by the trust itself while the remaining half is owned by your surviving spouse or civil partner. There are two different types of trust that can be used covered in the next pages.
There is a lot to recommend a property protection trust and for more help and advice about how to ensure you create one effectively to protect your spouse or civil partner, contact the Will Writer Group.

A Right to Reside Trust...


Among the issues discussed on this website when it comes to writing a Will, is the question of leaving a spouse or civil partner with a right to live in the family home.
As has been explained previously, without a Will in place, means you will die intestate which means someone else will need to decide what happens to your estate. This could also mean your possessions may be passed to people you do not approve of.
Essentially, the surviving partner would have a right to live in the home. The time period can be set to suit your circumstances. For example two years following death or literally for the remaining life of the survivor.
This limits the survivor to this home so as soon as they move out the ultimate beneficiaries would realise their inheritance.
For more help and advice about the right to live in a property after you die and any potential tax implications, speak with the helpful team at the Will Writer Group.

A Life Interest Trust...

Among the issues discussed on this website when it comes to writing a Will, is the question of leaving a spouse or civil partner with a right to live in the family home.
As has been explained previously, without a Will in place, means you will die intestate which means someone else will need to decide what happens to your estate. This could also mean your possessions may be passed to people you do not approve of.

This trust offers the survivor more options. The survivor gets all the benefits of the right to reside but can also have options built in to move home and take the deceased’s half of the home to a new property or even sell the property and draw and income from the capital. The capital what ever form this takes on death of the survivor is ring fenced for the ultimate beneficiaries. This protects your half of your biggest asset from future marriages and unforeseen creditors including long term care costs.

For more help and advice about the right to live in a property after you die and any potential tax implications, speak with the helpful team at the Will Writer Group.

Complex Trusts...

For some clients, there will be a need for bespoke trust planning which can be arranged through our partner trust specialists. These will be suitable for larger estates, clients with long term financial dependents such as vulnerable children or complicated blended families. There are a number of options for these trusts and they include

  • Bare trusts 
    Also known as a simple trust, the beneficiaries can enjoy possession of the property in a trust.

  • Interest in possession trusts
    This trust is for the beneficiary, known as the income beneficiary, to have a legal right to the income as it arises from the trust.

  • Discretionary trusts
    The discretionary trust trustees have discretion over how the trust is used for beneficiaries and how payments are made.

  • Accumulation and maintenance trusts
    The beneficiaries of such a trust will be entitled to the property, or the income, when reaching a certain age, though this is no more than 25.

  • Mixed trusts
    For those who need more than one type of trust, then a mixture may suit their needs. This may include, for example, an interest in possession trust along with a discretionary trust.

 

The Will Writers Group can explain more about these complex trusts.