Probate is the legal process of administering an individual’s estate after they pass away. It can be time-consuming and very complex. However, trusts can offer a way around waiting for probate.
Assets held in a trust no longer belong to the settlor (the person who gifted the money). The assets held in trust instead belong to the beneficiaries of the trust. This means that when the settlor dies, the assets are not included within the estate for probate purposes. By placing assets into a trust then wealth is transferred to your beneficiaries much quicker.
The probate process can be lengthy, often taking months to complete, depending on the complexity of the estate. Trusts can make sure that assets are passed to beneficiaries much quicker which can give you peace of mind knowing that your loved ones have financial support during this difficult period.
Trusts reduce your inheritance tax liability
Trusts being outside of your estate also means that after 7 years, there is no inheritance tax liability (inheritance tax can be up to 40%).
What is a trust?
A trust is a legal arrangement where assets are held by a trustee on behalf of beneficiaries. Trusts are commonly used in estate planning to manage and distribute assets according to the wishes of the settlor (the person who is gifting the money).
Trusts offer flexibility
Trusts offer greater flexibility and control over how and when you transfer assets to your loved ones, as opposed to using a traditional Will. When setting up a trust, the person who is gifting the assets can specify detailed instructions regarding how trust assets should be managed, invested, and distributed to beneficiaries.
Find out if trusts are right for you
There are different types of trusts and the tax rules and allowances are complex but trusts can be a very important part of estate planning and a tax-efficient way for you to pass assets to your loved ones. To find out if you should consider setting up a trust, we offer a no-obligation meeting with a financial adviser.
Book a meeting online now or call us on 0117 973 0500.
Advice relating to Trusts may involve the referral to a service that is separate and distinct from those offered by St. James’s Place. Trusts and are not regulated by the Financial Conduct Authority.
