At Streathers we have considerable expertise and experience in advising on wills which include trust provisions.

Trusts are inherently complex and will invariably include tax implications as well as legal and practical ones. A primary consideration will often be whether to set up a trust while you are alive, known as a lifetime trust, or to set up the trust in your will.

Reasons for considering a will trust

These may include :-

  • Seeking to protect your assets, typically your property, so that if your spouse survives you and needs care in the future, your share of the assets will not be potentially subject to having to pay for your spouse’s future care;
  • Where you have reasons to doubt the inheritance you want to leave to a family member will be utilised as you wish or preserved and enhanced for future generations. You may feel that some family members are financially irresponsible, immature or inexperienced.
  • You have very valuable or complex assets and feel that these would be better managed by trustees for the short, medium and long term benefit of those you wish to benefit.
  • Beneficiaries may possibly be too young to inherit your assets and therefore some long term plan is needed;
  • You have particular wishes as to how the money or other assets you will leave in your will should be managed, which may be ethical or otherwise.

Setting up a will trust and choosing trustees

As with any form of trust, the terms can either be very straightforward or highly complex and technical. If you fully trust the trustees you appoint you may just include fairly standard and short form clauses which give the trustees very wide discretion.

Alternatively, you may decide to set very clear directions as to how your trustees should administer the trust and restrict their powers.

Choosing trustees is a key decision and will be likely to impact your thinking as to the drafting of the terms of the trust. It is always a good idea to carefully consider who to choose as trustees and to check that those people are willing to take on the role, whether they will be paid for their time and expertise and what happens if they predecease you or die during the time period in which the trust is intended or likely to apply.

Are there any disadvantages to setting up a trust in a will?

Potential disadvantages of will trusts include :-

  • Thinking that you will definitely save tax. Tax laws change and experienced advice is strongly recommended.
  • Administration costs of the trust – trusts almost inevitably involve legal costs and other outgoings.
  • Could it be more beneficial to set up a lifetime trust?
  • The potential for conflict between trustees and beneficiaries.

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