IS IT THE RIGHT MOMENT TO BEGIN SAFEGUARDING YOUR WEALTH FOR THE FUTURE?

A UK trust is a legal arrangement in which one party holds and manages assets on behalf of another party, in accordance with the terms set by the trust’s creator.

They often serve as a safeguard for wealth, ensuring that assets are passed on to the next generation according to specific wishes. Trusts are essential in estate planning; however, due to their complexity, obtaining professional advice before setting one up is vital.

WHY CONSIDER A TRUST?

Imagine you want to leave your estate to your grandchildren, but they are still young adults. Would they handle sudden financial freedom responsibly, or might they lack foresight and spend it unwisely? Alternatively, you may have nieces and nephews, but you’re unsure how to distribute your wealth fairly.

A trust helps address concerns like these by allowing you to decide how and when your beneficiaries access their inheritance. Whether it’s providing for education, managing wealth for those who cannot handle large sums or supporting future generations, trusts offer customisable solutions to suit individual circumstances.

THE MANY FORMS AND PURPOSES OF TRUSTS

Trusts have been utilised for centuries and serve various functions. They can distribute gifts gradually over time or safeguard wealth for beneficiaries who may face difficulties, such as being too young, lacking financial knowledge or encountering external risks like unstable personal relationships.

For some, using a trust reflects broader family strategies, such as safeguarding assets against specific risks like gambling issues or external influences. Additionally, in jurisdictions where tax laws differ, trusts can have varying tax implications, making expert advice essential for effective planning.

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This article does not constitute tax, legal or financial advice and should not be relied upon as such. Tax treatment depends on the individual circumstances of each client and may be subject to change in the future. For guidance, seek professional advice. The Financial Conduct Authority does not regulate estate planning, tax advice or trusts.