A Look at the Different Types of Trusts Available in the UK
Popular media makes it seem that trusts are only for the wealthy when that isn’t the case. Trusts are for people who want to protect and provide for their families when they pass. It’s also for those who want to leave a legacy for the future generations of their family.
See, trusts are estate planning tools to help you save taxes, build up wealth, and avoid probate. An average person can set up a trust with the assistance of a competent attorney and have control over their assets during their lifetime.
It’s worth noting, though, that there are different types of trusts available. See them below.
1. Revocable Living Trust
The revocable living trust is usually the first type of trust that someone establishes. It is best for people who have a lot of money and do not need their assets to be distributed immediately after death.
The trust grants you the power to manage your own assets during your lifetime. You can place assets that you want to keep easy access to in your trust so you can control them until you pass. You can also choose who you want to manage the trust and the assets in it.
One thing to note is that you can revoke your trust at any time, provided that you are still alive.
2. Irrevocable Trust
An irrevocable trust does not allow one to change their trust after it has been established.
This is an ideal trust for people who want to establish a legacy for their heirs quickly and efficiently. Irrevocable trusts are also for people who want to protect their assets from creditors and others.
Irrevocable trusts are often used by people who have a lot of assets and want to avoid losing their money to creditors.
3. Charitable Remainder Trust
The charitable remainder trust is a trust that allows the grantor to pass their assets to a non-profit organization. Should the grantor pass, the non-profit organization receives the assets.
These trusts are often established by individuals who have a strong desire to leave their money to charity when they are gone. There are certain tax benefits for doing this, too.
It may, however, be a little complicated if you are not familiar with it. Check with an attorney to ensure you have the right trust in place.
4. Joint Trusts
Joint trusts are trusts used when two people want to co-own assets and pass them on to their kids in the future. It’s ideal for people who want to ensure that their assets will be passed on to their kids.
Just remember that establishing a joint trust means entering into a legal contract with the co-trustee.
You both need to decide how the assets will be distributed, who will handle them and how often you will update your beneficiaries.
How Does One Establish a Trust?
The best way to set up a trust is to have the help of an experienced attorney. They can help you choose the right type of trust and ensure that it is set up properly. In addition, they can help you make sure that the trust is clear and legal.
It’s important to keep in mind that you must update your trust when you get married, have a child, or when you want to change something about your trust. If you do not do this, you may be subjected to tax penalties.
For more information on trusts and the different types available to help you protect your assets, contact us today. Wills and Probate can help you in creating a trust and estate planning in the UK. We have the needed experience and resources to help you make the right choices for you and your family. Give us a call to get started.