Trust Wills continue to be a popular tool for effective estate planning, with HMRC reporting a total income of £3,075 million for trusts and estates in the tax year ending 2022, surpassing pre-pandemic highs (source: HMRC). This growing trend demonstrates the value that individuals and families place on safeguarding their assets and ensuring their wishes are carried out after they are gone.
At Garratts, we specialise in writing trust Wills that are uniquely tailored to your needs. Our team of expert wills and probate solicitors is here to guide you through the process, ensuring your wishes are carried out with care and attention to detail.
Understanding Trust Wills
A trust Will is a unique type of Will that incorporates a trust into its structure. It allows you, the testator, to dictate how your assets are managed and distributed after your death. In a Trust Will, you appoint trusted individuals or professionals, known as trustees, to hold and administer your assets on behalf of the beneficiaries you specify.
Within a trust Will, your assets are held within the trust and managed according to the instructions you have outlined. The trustees are responsible for deciding how the assets are invested, distributed, or used for the benefit of the named beneficiaries. This allows for a level of control and flexibility that a standard Will cannot provide.
There are two main ways to create a trust Will: as a Will Trust or a Lifetime Trust. A Will Trust is created upon your death, as per the instructions in your Will. Conversely, a Lifetime Trust is established during your lifetime and can be used to manage assets immediately.
What are the Different Types of Trust Wills?
The two most common types of trust Wills are: property trust Wills and discretionary trust Wills.
Property Trust Wills
Property Trust Wills are often used by couples who wish to ensure their surviving partner has a home for life while safeguarding their assets for future generations. Typically, the property is held in trust for the surviving spouse, who can continue to live in it rent-free for the rest of their life. After their passing, the property is then passed on to the beneficiaries, usually the children. This structure not only provides security for the surviving spouse but can also help mitigate inheritance tax liabilities and protect assets from creditors.
Discretionary Trust Wills
Discretionary trust Wills offer even greater flexibility by allowing the trustees to exercise discretion in how and when assets are distributed to the beneficiaries. The trustees can consider various factors such as the beneficiaries' ages, financial needs, and personal circumstances when making decisions. This type of trust Will can be beneficial in situations where beneficiaries are young, vulnerable, or have financial difficulties. It also allows for adaptability as circumstances change over time and offers potential tax advantages.
When to Consider a Trust Will
A Trust Will is not a one-size-fits-all solution. It is a specialised tool designed to address specific estate planning goals and family situations. If you find yourself in any of the following circumstances, a trust Will may be a valuable option to consider:
- Couples with children from previous relationships: A trust Will can ensure that your assets ultimately pass to your children, while still providing for your spouse or partner during their lifetime.
- Protecting assets for beneficiaries with financial difficulties: If you have concerns about a beneficiary's ability to manage their inheritance responsibly, a trust can safeguard those assets and provide for their needs over time.
- Minimising inheritance tax: Trust Wills can be structured to help reduce the amount of inheritance tax payable on your estate, allowing more of your wealth to pass to your beneficiaries.
- Complex family situations or assets: If you have a blended family, own a business, or possess assets in multiple countries, a trust Will can be tailored to address these complexities and ensure your wishes are carried out effectively.
Frequently Asked Questions
What is the difference between a trust Will and a standard Will?
A standard Will simply outlines how your assets should be distributed after your death. A Trust Will goes a step further by placing those assets into a trust, which are then managed by trustees according to your instructions. This gives you greater control, flexibility, and potential tax benefits compared to a standard Will.
Can a trust Will help me avoid inheritance tax?
Depending on how it is structured, a Trust Will can be used as part of a strategy to mitigate inheritance tax. This can be particularly beneficial for larger estates or those with complex assets. It is essential to consult with an expert solicitor to understand the specific tax implications and options available to you.
How much does it cost to have a trust Will written by Garratts?
At Garratts, we offer transparent pricing for our Will writing services. The cost of a Trust Will can vary depending on the complexity of your instructions and the type of trust involved. View our fees here, or contact us for a personalised quote based on your specific needs.
How long does it take to draft a trust Will?
The timeframe for drafting a Trust Will depends on the complexity of your requirements and the responsiveness of all parties involved. However, our team at Garratts is committed to providing an efficient and timely service. We can give you a clear estimate of the timeframe after an initial consultation to discuss your needs.
What happens if my circumstances change after I have made a trust Will?
Your Will can be reviewed and updated as needed to reflect changes in your life or wishes. We recommend consulting with a wills and probate solicitor if you are considering making changes to your Trust Will to ensure it remains legally sound and effective.
Still have questions?
Our team is here to provide personalised advice and guidance tailored to your specific needs. Get in touch with us to schedule a free initial consultation.
