In recent years the term “trust fund” has largely been associated with wealthy people or celebrities. However, this is a common misconception as setting up a trust fund is something that isn’t exclusive to the wealthy and can have a number of benefits for both yourself and your family.
Security
One good reason to set up a trust is that it can secure assets. Having a trust in place means beneficiaries can have quicker access to assets while also making it harder for people to contest it. There is also the added benefit of more control, so you can specify what the money is to be used for (for example university, living expenses etc) and controlling the amount distributed to ensure more careful budgeting on the part of the beneficiary.
A trust in many ways can be more secure than a Will – it can allow you to be clearer on who receives what payments or how assets can be used or shared amongst the beneficiaries.
Tax
Another benefit of setting up a trust fund is to reduce tax payments. Assets such as property can result in reduced taxes, while a certain amount of money can be given to children and other relatives/beneficiaries tax free (this can vary depending on the relative/beneficiary in question).
Be prepared
People often set up a Will because they want to be prepared for the future. However, there can be other circumstances – you may become infirm or find it hard to cope as you get older. A trust can help you be ready for these difficult circumstances, allowing you to be ready in advance to ensure people are aware of your wishes.
It should be said that a trust is not perfect and people can contest them if they feel that the person setting them up is being exploited or that what they are doing is not in the best interest of the beneficiaries involved. There is also the fact that trusts are not publicly recorded in the same way that Wills are, allowing for more privacy.
Getting the right people
It is important that you have the right people overseeing the trust. In effect you are trusting someone with the handling of assets and money so it is vital that you use someone who is aware of this and can deal with the responsibility of looking after money and assets for the beneficiaries involved.
At Larcomes we believe in having the specialist knowledge and resources to hand in order to make sure everything is put through properly while at the same time having hands on professionals who can deal with the more emotional aspects as well. There is the potential for trust funds to become contentious so it is vital to use a legal firm that understand this difficult balance.
For more information or to discuss your own circumstances regarding setting up a trust fund please contact us today and we will be happy to go over this in more detail with you to help you make the right choice for you and your loved ones.