Wills and Trusts

Solicitors in Essex & London

All Wills contain at least a basic form of trust by appointing executors to hold a deceased person’s assets on trust to pay any liabilities and expenses before distributing the balance to the beneficiaries named in the Will. However, some clients have a need for a more complex type of trust in their Will. Our expert private client solicitors have a wealth of experience in advising on and preparing complex Wills with trust arrangements for clients across Essex and London.

It is a common misconception that trusts are reserved for the wealthy or those with complex assets. In fact, most trusts are quite simple structures that are often contained in Wills. A trust is made up of three main components:

A trust fund – this typically comprises property or cash that can be invested.
Trustees who manage the trust fund – these can be lay trustees or professional trustees.
A beneficiary or beneficiaries who may benefit from the trust fund.

The two main types of Will trust are:

Discretionary trust

A discretionary trust – this means the trustees have discretion as to who should benefit from the trust fund. The nature of the trust means that there is more than one beneficiary amongst which that discretion can be exercised. The trustees are generally given separate written guidance as to how they should exercise their discretion.

Life interest trust

A life interest trust – the nature of a life interest is that there is initially only one beneficiary. In most cases the beneficiary is only entitled to the use of the trust fund (e.g. to occupy a property) or receive any income that the trust fund generates. When the sole beneficiary dies, the trust fund usually passes outright to other beneficiaries. This type of trust arrangement is common in second marriages, or, where people are concerned about the risk of future care fees.

Will trusts are very often created in circumstances where the deceased has asset protection in mind and wants to ensure that their assets are not used for any purpose other than for what the deceased intended. This is a complex area of law that requires legal advice from a solicitor with expertise in Wills and Trusts.

The most common circumstances when a Will trust may be appropriate are:

When an estate is at risk of being depleted in care fees in the event that a surviving spouse requires nursing care. It is a common concern for married couples that the wealth they have worked hard to create could be depleted in care fees in later life. Our specialist private client team in Essex and London are able to advise on this complex area of law. This includes advising on the circumstances when you may be liable to pay any future care fees, and the options available to you within the relevant framework of legal regulations to minimise your future potential care fee liability.
When a married couple have children from their previous relationships or marriages. In these circumstances, a married couple will often want to balance the competing needs and interests of each other and their respective children. The desired outcome for both spouses is to provide long term financial security for each other whilst protecting the long term inheritance of their respective children.
When there are concerns that an adult child beneficiary is unable to responsibly manage a large inheritance. In the modern age of easy-to-access credit, a culture of ‘have now and pay later’ and high personal debt, it is a common concern that an adult child could mismanage an inheritance. An adult child beneficiary may also be at risk of bankruptcy, in which case any inheritance could pass directly to the trustee in bankruptcy. A trust may avoid this.
When an adult child beneficiary is currently going through divorce proceedings and there is a risk that any inheritance received could form part of the financial settlement between the divorcing parties. In this case, it is possible to protect assets by placing them in trust – this arrangement requires careful legal analysis.
When the owner of a business dies, surviving business partners or shareholders may want a guarantee that they are able to acquire the deceased’s interest in the business rather than that interest passing to the deceased’s family. Taking advantage of any applicable relief from inheritance tax, combined with a suitable life insurance policy can assist with the smooth continuation of the business, whilst also potentially significantly reducing any inheritance tax that may be payable by the deceased‘s family in the future.

Contact Our Private Client Department

Key contact: Matthew Edwards

Find out more about our Wills, Trusts and Lasting Powers of Attorney services

If you require legal assistance relating to Wills and trusts, please feel free to contact any of our private client solicitors directly to discuss further. We offer consultations in any of our five offices across Essex and London, are able to see clients at short notice, and also offer home visits to those who are unable to personally attend our offices due to ill health or other reasons.

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