Trust Wills

Trust Wills

Life Interest Trust Wills

A Trust is created when a person (the settlor) gives property to other people (the trustees) to hold for the benefit of a third person or group of people (beneficiaries)

The beneficiary of a life interest Trust is called the “life tenant”

A life interest Trust can be a full life interest in the entire residue of an estate or a life interest in property only

A beneficiary (recipient) is given an interest in Trust assets for their lifetime, which is usually the entitlement to receive income, and/or live in a property owned in the Trust

The “remainderman” is the beneficiary who will receive Trust assets after the life tenant has died


Discretionary Trust Wills

This type of Trust gives trustees total discretion over which of the beneficiaries receive anything from your estate, when they receive it, and how they receive it

A letter is also prepared by the person writing their Will to give guidance to the Trustees

There must be more than one beneficiary with this type of Trust

These Trusts are useful if you want to leave your estate to someone who is unable to manage their own finances, or if they receive means tested benefits and you do not want to jeopardise this

Your Trustees are trusted to make a decision about how your estate should be distributed, rather than you making that decision at the time of writing your Will

There is no fixed entitlement to money from the Trust by the beneficiaries and therefore the assets of the Trust are not taken into account when assessing entitlement to means-tested benefits or Local Authority funding

The tax treatment will be discussed with you by your adviser and should be considered

Disabled Persons Trust Wills

For the purposes of this type of Trust, a ‘disabled person’ is someone who must meet a specific criteria.

The Trustees still have discretion over the use of capital and income for the benefit of the disabled person however this must be applied wholly for their benefit, subject to an exception where the lesser of £3,000/3% of the value of the Trust fund can be applied to another beneficiary of the Trust in each tax year

Your adviser will consider whether a Discretionary Trust or Disabled Person’s Trust is more suitable for your personal circumstances.

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