ESTATE PLANNING
Trusts
One of Roxburgh Financial Services’s paramount services is guiding clients through the nuanced succession planning process. This service ensures a seamless transition of assets and safeguards the next generation’s financial future while optimising tax efficiency. Our advisory expertise extends to the strategic use of trusts, a pivotal tool in estate planning that provides security for your beneficiaries and potential tax benefits.
Trusts are a cornerstone of estate planning
A trust is a legal framework designed to hold and manage your assets for the people you choose as beneficiaries. It’s a mechanism that serves multiple purposes, from tax saving to providing a safety net for beneficiaries needing more capacity to manage their finances effectively. These beneficiaries can include minors, individuals with disabilities, or anyone who might find the responsibility of handling a lump sum of money challenging.
Maintaining a degree of control over assets
Trusts stand out as an invaluable option for those looking to maintain a degree of control over their assets even after they are passed on. This is particularly relevant in complex family situations. For instance, a trust makes this possible if you’re in a second marriage and wish to ensure that your spouse is taken care of in your home but also want the property to go to your children from a previous marriage. It allows your spouse the right to live in the property during their lifetime, with the assurance that it will transfer to your children upon their passing.
Another advantage of using trusts is their ability to bypass the probate process. Probate can be lengthy and cumbersome, often taking nine to twelve months to conclude in England and Wales. This delay can significantly hinder the timely transfer of your estate to your beneficiaries. Assets placed in a trust are generally not considered part of your estate for probate purposes, enabling your executors to access and distribute these assets without the usual delays.
Trusts versus Wills
Trusts are sophisticated estate planning tools that hold specific assets managed by appointed Trustees. These assets are distributed to beneficiaries based on the terms set within the trust. Trusts serve multiple purposes, including asset protection and minimising Inheritance Tax burden on your heirs. They allow for a level of control over how and when your assets are distributed, making them an attractive option for many.
On the other hand, Wills are personal legal documents that outline how you wish your estate to be distributed upon your death. Unlike trusts, Wills offers the flexibility to appoint guardians for minor children, detail funeral arrangements, and ensure that your assets are passed on according to your explicit instructions.
Inheritance Tax strategies: Trusts and estates
The strategic use of Trusts can mitigate the impact of Inheritance Tax, potentially saving your beneficiaries from substantial tax burdens. With Inheritance Tax rates reaching up to 40% above the initial £325,000 tax-free allowance (anticipated to remain until at least 5 April 2028), employing a Trust can be wise. Trusts enable you to shield assets from Inheritance Tax liabilities under certain conditions while allowing you some oversight as a Trustee if established during your lifetime.
An Inheritance Tax planning trust is designed to protect against hefty Inheritance Tax charges, preventing your heirs from liquidating property or investments to cover these costs. It ensures that the assets you intend for your beneficiaries are preserved and transferred efficiently. Additionally, Trusts can facilitate the transfer of property value to the next generation while enabling the surviving spouse to remain in the family home.
Ready to discuss your estate planning with one of our highly experienced team?
Establishing a trust involves navigating complex legal frameworks and correctly preparing all documentation. Roxburgh Financial Services is here to guide you through this intricate process. Whether you’re looking to review existing arrangements or create new estate planning documents, our team of experts can provide comprehensive support tailored to your unique situation.