Question – Why use Discretionary Trusts in your Wills?
Answer – Why wouldn’t you?
If you leave an asset, a percentage of your estate or your entire estate to someone directly, they could lose it the next day in many ways. In the society we live in there’s lots of ways of becoming poor, and, subsequently, becoming wealthy is difficult and for many people it’s taken a lifetime for them to accumulate their wealth. So it stands to reason that they don’t want to lose it and they don’t want their children to lose it either. Wealth can be lost to pay for care in later life, creditors and bankruptcy can take it, new spouses on the scene can obtain it through re-written wills and the taxman can take it, he may take some on your death and if you add it to your children’s own estate the taxman may take more when they eventually die too.
How can this be prevented? Simply by leaving assets and/or your estate in trust in your wills, a Discretionary Trust can allow your loved ones to continue to benefit from your estate but it removes the risk of them losing it for any reason. It doesn’t have to prevent them from spending your money but protects it from being taken.
How can Discretionary Trusts do this?
A – Cost of Care – Trusts remove some of the estate on first death
B – Creditors/Bankruptcy – Trusts remove the risk of losing the whole estate in such a situation, not only for the surviving spouse but also for your daughters and future generations (for 125 years)
C – Marriage after death – Trusts prevent any new spouse from getting your assets after first death, that inheritance will end up with your daughters and their future generations. (for 125 years)
D – Generational IHT – Trusts will ensure that any inheritance that you pass to your daughters will not increase their own existing IHT problem if they have one, it will remain outside their estate and the estate’s of future generations (for 125 years)
E – Divorce – Trusts will prevent your legacy being used in any future divorce calculations for either your surviving spouse, your daughters or future generations
If you’ve read this and feel that your estate and your spouse and children would benefit from this type of Estate Planning then you really need to give me a call on 01305 774786.
I look forward to helping you and your loved ones.