Why Gift Assets into a Trust During My Lifetime?

Note: The following article is part of our Complimentary Articles Series, designed to provide additional insights and detailed information on specific topics within estate planning.

Alongside this article, we suggest exploring our pillar articles for a comprehensive understanding of general estate planning issues.

• Should I Have a Trust?
• When Should I Consider Getting a Trust?
• What is a Trustee?
• How Do I Remove a Trustee?
• Can I Have More Than One Trustee?

INTRODUCTION

Giving assets into a Trust while you are still living is a wise decision and carries several advantages, including asset protection and Beneficiary care.

This article explores the rationale behind such a decision and how it might affect your estate plan.

WHY THINK ABOUT A LIFETIME TRUST?

• Avoiding Probate: Probate is the legal and financial process that deals with a deceased individual's assets, verifying a Will is valid (if one exists) and confirming the Executor's authority to manage the Estate. However, the Probate process can be expensive and time-consuming since the Executor must apply for a Grant of Probate before any of the deceased person's assets can be distributed. On the other hand, holding assets in a Trust enables a smoother distribution to Beneficiaries. Since they fall outside the Probate process, you can avoid the legal fees and other related costs related to Probate, and your Beneficiaries can gain access to your assets more quickly without all the bureaucracy.

• Protection of Assets: Assets can be protected from certain risks, such as court rulings and creditors. A Trust ensures your assets stay in your family and are distributed according to your instructions.

• Protection for Beneficiaries: If some of your Beneficiaries are younger or more vulnerable, a Trust can enable you to ensure that your assets are used responsibly and for their benefit. For instance, you could set certain conditions, such as a Beneficiary reaching a certain age or for specific purposes like education or healthcare. In this way, the Trust ensures a way of providing stability and/or support over time.

• Will Contestation: Putting assets in a Trust lessens the possibility of disputes over your Will. This might be a favourable approach when certain decisions you've made might not be popular among particular Beneficiaries, such as when you might have excluded specific individuals from your Estate. Since assets within a Trust are not part of your Will, they're not subject to the same terms, and its assets can be distributed differently according to the Trust's instructions.

DOES A TRUST ALIGN WITH YOUR OBJECTIVES?

Even though creating a Trust has many advantages, you should carefully consider this vehicle, taking into account your family's unique circumstances as well as your own.

When considering whether a Trust is suitable for you, you might want to consider the following types of Trusts:

• Revocable Living Trusts: These allow you to maintain control over your assets during your lifetime and are generally more flexible in that you (the Settlor) can make changes, amend, or even revoke the Trust if you wish.

• Irrevocable Trusts: These types of Trusts are less flexible because they cannot be modified, amended or revoked. However, they provide more protection, such as tax shelter benefits that Revocable Trusts do not).

Need to know more?

If you wish to evaluate whether a Trust aligns with your estate planning objectives, Squiggle can provide some clarity and direction, helping you to tailor a plan that suits your loved ones' unique circumstances.

Book a callback, and we'd be happy to arrange a no-cost, no-obligation discussion with you to lay out the options available.

Alternatively, call us on 01233 659 796.

Or reach out to us here.