Information and advice regarding Trusts arising out of a Will in the Buckinghamshire, Berkshire, Oxfordshire area

Trusts arising out of a Will

Wills in English will advise on Trusts, for example if you have children under 18 years old, and will build appropriate instructions in your will as per your requirements.

A minimum of two Trustees are needed, to give good receipt

Accumulation and Maintenance Trusts:

Trusts arise out of Wills when either expressly stated or when beneficiaries cannot look after their own affairs. Beneficiaries typically at risk include young children. Minors for example can not give valid receipt for money. Trusts are required by law to protect the young; if missing a statutory trust will apply. These typically include bereaved minors trusts (inherit when they are 18 years old) and 18-25 trusts that delay inheritance at a reduced rate until that young person is 21 or 25 years old.Trusts that continue beyond 18 are subject to 6% tax every 10 years so a trust maturing at 21 pays 3/10 of 6% and at 25 pays 7/10 of 6%. Disabled persons discretionary trusts do not pay 10 year charges and may also benefit others in their family.

Property Protection Trusts:

Individuals may typically wish to protect property for their children or other members of their family while providing for their husband, wife or partner who would otherwise be homeless or financially compromised. Surviving Spouses may be given a life tenancy or a right to occupy depending on their circumstances . Children's inheritance may be so protected from predators as the survivor has a life tenancy rather than an absolute interest to pass on.These frequently quailify as Immediate Post Death Interest Trusts.

Bare Trust:

Occurs when one beneficiary has an immediate and absolute right to both capital and income
No 10 year or exit charges.

Nil Rate Band Discretionary Trusts:

These remain useful vehicles for unmarried couples to provide for one another as such couples do not benefit from a transferable nil rate band.
It is also useful for a group of beneficiaries who have varying needs and is especially appropriate when the surviving spouse has sufficient funds not to need to claim to be a dependant on the estate of the deceased.

Pilot Trust:

Set up with a nominal deposit (Say £10) and full nil rate band (currently £325,000).
Exempt from 10 year charges.
Can set up a series of these but will incur fees. HMRC is likely to set a single IHT threshold which will effectively make these redundant.