Five Reasons Why You Should Set Up a Trust

Setting up a trust can be a practical way to protect your loved ones financially. With a trust, one or more trustees hold and manage assets for the benefit of chosen beneficiaries, providing security, flexibility, and peace of mind. Here are five reasons why a trust might be the right option for you:

1. Protecting Family Assets

A trust can help safeguard family assets for future generations. Whether it’s property, investments, or other valuable assets, placing them in a trust ensures they’re managed according to your wishes and protected from unexpected claims. This can be particularly important if you want to ensure assets stay within the family or are safeguarded for young beneficiaries until they reach an age where they can responsibly manage them.

2. Tax Efficiency

Some trusts can provide tax advantages, helping to reduce the impact of inheritance tax and capital gains tax on the assets you pass on. Certain types of trusts are designed to be tax-efficient, ensuring more of your assets go to your beneficiaries rather than being lost to taxation. Working with a legal professional can help you select the trust structure that best aligns with your tax planning goals. Please note that putting assets into trust will not always lead to a reduced tax bill and can sometimes have unintended consequences so it is important to understand exactly why you are using a trust and what you expect it to achieve.  Legal and tax advice is essential here.

3. Control Over Asset Distribution

One of the main benefits of a trust is the ability to control how and when your assets are distributed. You can set specific conditions, such as age requirements or milestones, ensuring beneficiaries receive support at appropriate stages of their lives. This can be particularly beneficial for those with young children or family members who may need guidance in managing significant assets.

4. Providing for Vulnerable Loved Ones

For families with vulnerable loved ones, a trust offers a secure way to provide ongoing financial support without jeopardising eligibility for means-tested benefits. Trustees can manage the trust in a way that provides for daily needs and long-term care while keeping the assets separate from the beneficiary’s direct control.

5. Protecting Against Unforeseen Circumstances

Life is unpredictable, and a trust can offer protection against unforeseen circumstances, such as a divorce or financial difficulties. By keeping assets in a trust, you help protect them from external risks that could otherwise affect your beneficiaries. For example, in the event of a divorce, assets held in a discretionary trust may be better protected from division than assets owned outright.

Setting up a trust involves careful planning and consideration of legal and financial factors. At Marsons Solicitors, we can guide you through the process, help you understand the different types of trusts available, and ensure your trust is set up in line with your goals.

To learn more about how a trust can benefit you and your loved ones, contact us today. You can also visit our Personal Services page to explore additional ways we can support your planning needs.

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