Trusts, Wills, LPA’s, Probate & Estate Management

Writing a will  – Free Will Review Offer

Making a will is the only way that you can be confident that your wishes will be carried our when you are no longer here. When you have a will you can be confident that your loved ones will be provided for how you intended without leaving them with unnecessary problems or concerns.

We understand that writing a will can often be a difficult task and it can never seem like the right time. It is only normal putting off writing a will however, our helpful, friendly and supportive team can help you with some of the difficult and challenging decisions arising out of writing a will. We make it our mission to find out what is important to you and will guide you through the process making sure that making a Will is as simple and straightforward as possible.

Probate and Estate Management

Dealing with the loss of a loved one can be a difficult and emotional time for you and your family and dealing with the administration of your loved one’s estate may be the last thing you want to do.

Our lawyers and litigators have helped many families over the years with estate administration who are not only local to our office but international We can help you with collecting assets, applying for a Grant of Probate and dealing with any tax implications that may arise.  Being an executor or an administrator can carry with it a lot of responsibility and we will therefore be with you every step of the way until all issues are resolved.

Lasting Power of Attorney (LPA)

A Lasting Power of Attorney is an important legal document that enables you to appoint someone to make decisions about your finances, property or welfare. Incapacity, illness or even being abroad may make it difficult for you to deal with your day to day affairs so preparing a Power of Attorney appointing someone who is committed to acting in your best interests is an important decision.

A Power of Attorney is extremely important as your partner or family members do not automatically have legal authority to deal with your financial or personal matters. It is for this reason that we take our time in explaining these Powers of Attorney to our clients and carefully taking their instructions.

Trusts

A trust is a legal arrangement for managing assets. There are different types of trusts and they are taxed differently.

In a trust, assets are held and managed by one person or people (the trustee) to benefit another person or people (the beneficiary). The person providing the assets is called the settlor.

Different kinds of assets can be put in a trust, including:

• cash
• property
• shares
• land

Trusts are set up for a number of reasons, including:

• to control and protect family assets
• when a beneficiary is too young to handle their affairs
• when someone cannot handle their affairs because they’re incapacitated
• to pass on assets while a settlor is still alive
• to pass on assets when a settlor dies (a ‘will trust’)
• under the rules of inheritance if someone dies without a will (in England and Wales)

Settlors

The settlor decides how the assets in a trust should be used – this is usually set out in a document called the ‘trust deed’.

Sometimes the settlor can also benefit from the assets in a trust – this is called a ‘settlor-interested’ trust and has special tax rules.

Trustees

The trustees are the legal owners of the assets held in a trust. Their role is to:

• deal with the assets according to the settlor’s wishes, as set out in the trust deed or their will
• manage the trust on a day-to-day basis and pay any tax due
• decide how to invest or use the trust’s assets

If the trustees change, the trust can still continue, but there must always be at least one trustee.

Beneficiaries

There might be more than one beneficiary, like a whole family or defined group of people. They may benefit from:

• the income of a trust only, for example from renting out a house held in a trust
• the capital only, for example getting shares held in a trust when they reach a certain age
• both the income and capital of the trust

Setting up a trust

Trusts can be set up at any time or written into your will.

A solicitor will guide you through setting out:

• what the assets are
• who the trustee and beneficiary are
• when the trust becomes active

Choose people you can rely on to be your trustees and make sure they’re happy to take on this responsibility. You should have at least two trustees but can choose up to four.

Types of trusts

There are many different types of trust that can be set up depending on how you want to control your assets.

Bare trusts

This is the simplest trust and gives all assets to the beneficiary as long as they’re 18 years old or over (in England and Wales).

Assets in a bare trust are held in the name of a trustee. However, the beneficiary has the right to the contents of the trust at any time if they’re 18 years old or over (in England and Wales). This means the assets set aside by the settlor will always go directly to the beneficiary.

Bare trusts are often used to pass assets on to young people – the trustees look after them until the beneficiary is old enough.

Interest in possession trust

The beneficiary can get income from the trust straight away but cannot control the assets that provide the income. The beneficiary has to pay income tax on the money they receive.

It’s common for a settlor to give their partner access to this kind of trust in their lifetime, with any assets passing to the settlor’s children after their partner dies.

Discretionary trust

The trustees have complete control over the assets and the income they generate, deciding how and when to give them to the beneficiaries.

People may set up this kind of trust for their grandchildren, making the grandchildren’s parents trustees.

Mixed trust

This combines elements from different trusts. For example, it might give the beneficiary a right to the income (called an interest in possession) of half of a trust fund.

Trust for vulnerable person

If the only beneficiary is vulnerable, for example someone who is disabled or an orphan, they will pay less tax on the income from the trust.

Read about trusts for vulnerable people

Non-resident trusts

All the trustees live outside the UK. This can mean the beneficiary pays less income tax.

Understand the basic rules of non-resident trusts

Find out about income and benefits from the transfers of assets abroad or from non-resident trusts

Read more about types of trusts on GOV.UK

Taxes

Different types of income from trusts have different rates of income tax. Each type of trust is taxed differently.

Read more about trusts and income tax

Read about paying tax on a trust if you’re a beneficiary

Read about paying tax on a trust if you’re a trustee

Inheritance tax

If you put assets into a trust, inheritance tax will need to be paid on it at various points in the lifecycle of the trust.

For example, inheritance tax is due when:

• assets are put into a trust
• a trust reaches the 10-year anniversary of when it was set up
• assets are transferred out of a trust or the trust ends
• someone dies and a trust is involved in their estate

Read more about trusts and inheritance tax

Capital gains tax

Capital gains tax on trusts is a tax on the profit when assets that have increased in value are put into or taken out of a trust.

See GOV.UK guidance on working out and reporting gains

Long-term care 

If you need long-term care and you benefit from a trust, your local authority will take this into account when assessing your circumstances.

If you’re entitled to the income of a trust only, the capital (lump sum) will not be considered

You may be able to put your property in trust before going into care, so it’s not considered to be owned by you and is not used to fund your care. However, your local authority may challenge this if it can show that your main reason for putting the property in trust was to avoid care costs.

Acting as a trustee

A trustee is responsible for managing the assets in a trust and fulfilling the purpose of the trust.

The role of a trustee carries a lot of responsibility.

Trustees must be willing to put in the time and effort necessary to make sure that the settlor’s wishes are carried out, and that the assets are managed for the beneficiaries.

If you’re asked to be a trustee, talk to the settlor about their expectations of you, and who the other trustees are (you’ll be expected to work with them in the future to manage the trust).

Read about trustee tax responsibilities on GOV.UK

Ending a trust

Trusts can be ended by an event, for example:

• the coming of age of the beneficiary
• the death of the beneficiary
• as a result of a decision by the trustees

If you’re a trustee, your solicitor can help you decide if you have:

• carried out the purpose of the trust by ending it
• kept suitable records of your actions
• given the assets in the trust to the beneficiaries
• reported on and paid any tax owed

Contact Us

Clitheroe:
 01200 428 102

Longridge:
 01772 802 011

  Email us