By writing a will or creating a trust, you can ensure that your money and assets go to the right people.
What is a will?
A will allows you to decide who benefits from your assets after you die. When you make a will, you appoint one or more executors. They will make sure that your assets are distributed according to your wishes. They also become responsible for using your estate to clear your debts and pay inheritance tax if due.
If your estate is worth more than £5,000, the executor(s) must apply to the probate registry for legal right to administer your estate.
What is a Trust?
A trust allows you to pass your assets to beneficiaries when you are still alive or after you die. When you create a trust, you appoint a trustee. He has the legal right to control the assets on behalf of the beneficiaries.
Here are some reasons why people create a trust
- To pass assets while still alive
- The beneficiary is under 18 years of age
- The beneficiaries cannot manage your money and assets at present
In most cases, a trust is created to protect assets for children who cannot handle big money perhaps due to their age, health issues or involvement in drugs. A trust limits the financial freedom of the beneficiary.
Key differences between Wills and Trusts
- A will is written for distribution of assets while a trust is created for passing the control of assets.
- A will can take effect only after your death while a trust can take effect when you are still alive.
- With a will, assets can go directly to the beneficiaries. With a trust, the trustee controls the assets on behalf of the beneficiaries.
- When assets go to a beneficiary through a will, the recipient has full control of the assets. He can sell or destroy the assets. However, when assets are held in a trust, the beneficiary does not have full control. He cannot sell or destroy the assets.
- A will is a public affair while a trust is a private matter.
Many do not realise how important it is to have a will or a trust in place. Both can ensure financial security for your loved ones.
In fact, to have better control over your assets, you can have both a will and a trust that complement each other. However, please note that if there is a conflict between the will and the trust, the trust will stand good.
How Aristone Solicitors can help
We can help you decide what should be placed in trust and who should be appointed as trustee. Please keep in mind that the trustee you appoint must be someone who respects you and your beneficiaries.
There are several types of trust, and each type has its own tax consequences. We can help you consider all the options and give advice on which type of trust is best for you depending on what you want to achieve with the trust.
Careful attention must be given to the wording of the trust. We can provide the professional help you need. When writing a will, it is possible to create a trust by default on account of not understanding the legal effect of the words used and this comes to light only after the person’s death. We can help you avoid such mishaps.