Trust matters

Trusts can protect assets. A trust is a legally binding arrangement whereby you choose trustees to look after the assets and are useful in many different situations. Some examples of these are:

·  After a personal injury

If you place the compensation award in a trust you can get double the benefit in that you can benefit from the injury compensation award as well as still get means tested benefits.

·  If you have young children

A common trust is where parent’s state in their Wills that everything will be looked after for their children until their 25th birthdays, for example.

·  If you have loved one with a learning disability

If they inherit a lump sum outright that would affect their entitlement to means tested benefits but if the money is instead put on a flexible trust they can benefit from the trust and still also get means tested benefits.

·  Benefitting successive generations

A pot of money can be available through the trust to different generations (such as your children and grandchildren) without it being taxed to Inheritance tax on, for example, your children’s deaths.

·  Ensuring your assets stay within your family

It can happen that, for example, a widow remarries and leaves everything inherited from her 1st husband to her 2nd husband. This can occur simply because the widow does not realise that on her remarriage the Will she made at the same time as her 1st husband, would automatically be cancelled.

This can be prevented by the 1st husband setting up a trust in his Will in favour of his widow.

·  Existing trusts and the new residential nil rate band

As from April, a tax-free allowance gradually increasing to up to £175K (or £350,000 per couple) can apply on the family home.

It is important to review existing arrangements to check that the relief can be claimed. Many trusts are flexible enough to enable the new allowance to be claimed but it is important to take advice to ensure the relief can be claimed.

For example a discretionary trust set up by a will can give the flexibility to maximise the benefit of the relief whilst taking into account all the circumstances at the time. It is important though that the trustees use their discretionary powers within two years of the death so the relief can be claimed.

Lynn Emery has specialised in such matters since qualifying as a solicitor nearly 30 years ago. As well as being a full accredited member of Solicitors for the Elderly (holding the Older Client Care in Practice award) Lynn is a Trust & Estate Practitioner (TEP) and a full member of the Society of Trust and Estate Practitioners (STEP). She is also a member of the Probate Section of the Law Society, the Agricultural Law Association & STEP's Special Interest Group's for Mental Capacity, Cross Border Estates & Business.

Lynn has large city firm experience without charging large city prices and is based in Cumbria but works for clients all over the country.

She is a Trustee of Carlisle & Eden Mind, included in Mencap’s, Alzheimer's Research UK’s & the National Autistic Society’s lists of specialist solicitors providing will and trust advice & is a Dementia Friends Champion.

Her solicitors’ regulation and professional insurance requirements are covered by a consultancy agreement with Apex Law Solicitors. Apex Law operate both nationally and internationally and keep their prices down by ensuring their overhead costs are low where in this highly technological world, expensive office premises can only drive up costs.

Lynn Emery lynn@apexlaw.co.uk