What is a trust?
Simply put, a trust is formed when a person (settlor) gives an asset or assets to someone (trustee/s) to look after for the benefit of someone else (beneficiary/ies). In your Will your executors also often act as trustees, because it is their responsibility to look after your assets for your beneficiaries while the estate administration is carried out. You can read more information about the role of trustees in this Kings Court Trust Blog.
Why might I want to use a trust?
If you gift assets to someone in your Will, they are then in full control of those assets. This might sound fine, but there are many reasons why giving an outright gift may not be possible or appropriate, such as where beneficiaries:
- are under 18 years of age
- lack the mental capacity to look after their own financial affairs due to serious injury, disability, learning difficulties or mental health issues
- are likely to squander assets through profligacy or addiction
- get divorced
- are a surviving spouse, get remarried and then die without making a new Will (known as sideways disinheritance)
- receive means tested benefits or are subject to local authority financial assessment for care needs
There are many different ways that trusts can be used in Wills to offer continued protection for and control over your assets. We ensure that we take the time to understand your circumstances and wishes fully and, where we think trusts might be useful, will explain the pros and cons as clearly as possible, so that you can make an informed decision.
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