Trusts & Settlements

There are three myths about trusts which have the unfortunate effect of making people unduly wary of them. The first (which is an impression created by media reports of celebrity “trustafarians”) is that all trusts are endowed with multi-million pound trust funds. The second (beloved of politicians) is that all trusts have been established purely for the purpose of tax evasion. The third (created by Charles Dickens) is that they are fiendishly complicated and tie up assets in the red tape created by ancient laws. In fact most trusts are of modest value, have been established for reasons entirely separate from any tax consideration and they are governed for the most part by the Trustee Act 1925 and the Trustee Act 2000 which post-date “Bleak House” by some years.

 In fact most people will have an involvement with some form of trust because, for example:

  • All jointly owned land and property is held in trust;
  • All pension schemes are trusts; and
  • All bank accounts and investments for children are held in trust.

In fact trusts are common-place and not at all frightening. Trusts can be used to provide for people not able to look after their own affairs such as grandchildren, vulnerable or disabled people or to provide for elderly relatives. Trusts can be used to protect family wealth from spendthrift children, to keep assets in the family in the event of divorce or to protect assets being used to pay nursing home fees.

Trusts are regularly been used in Inheritance Tax planning. The reason for this is not to gain any particular advantage but because Inheritance Tax planning often involves making gifts to children or grandchildren and it may be better for the money or assets being given to be held in a trust rather than being given directly to the children or grandchildren of the donor. In other words the trust element of the tax planning is simply to allow gifts to be made in a practical and sensible fashion for family reasons.

The problem with the myth about trusts being used mainly for tax evasion is that politicians of all colours have come to believe that it is true and have framed the tax system accordingly. This means that there are significant complications in the taxation of trusts and this can mean that income and capital gains earned by trusts suffer more tax than the same level of income or gain in the hands of an individual. However, with a prudent investment strategy and good trust management those disadvantages can be mitigated.

We live in a time of more complicate family structures and this leads to difficulties of reconciling provision for spouses and partners on the one hand and children and grandchildren on the other. Trusts offer an effective and practical way of balancing those interests both when making provision in lifetime or under the terms of one’s will.

Increasingly those contemplating marriage are considering pre-nuptial or post-nuptial agreements to protect their wealth in the event of divorce. It may well be the case that in certain circumstances a trust might do that job just as well or better. Certainly gifts from parents to the bride or groom have traditionally been made into trust in order to address the same concerns as lead people to consider “pre-nups”.

Among the reasons for establishing trusts are:

  • Provision for relatives with learning disabilities;
  • Provision for relatives with mental capacity or mental health issues;
  • Provision for relatives whose means-tested benefit claims need to be preserved;
  • Provision for relatives whose financial management is of concern or who risk bankruptcy;
  • Providing for minor children or grand-children; and
  • Creating a succession to property where you need to allow a spouse to have use of the property but also need to ensure that it passes to your children in due course.

Why Choose Us

At Gilbert Stephens we are very experienced in advising on the creation and management of trusts and settlements. We can assist you in drafting trust deeds and establishing the trusts they create. We can also look after your trust administration and tax management.

The qualified Independent Financial Advisors at Gilbert Stephens Financial Services Ltd (GSFS) are very experienced in investment advice for trustees. Having worked alongside a busy Private Client legal practice for many years they have accumulated far more experience of trusts and working with trustees that most other financial advisors.

We also offer trustees services with partners of Gilbert Stephens LLP being willing to act as trustees of our client’s trusts. This is a service we have offered for many years and is a regular part of our practice.

Tax and trusts always run in parallel and our trust advisors are well versed in the taxation issues surrounding trusts and the role of trusts in Inheritance Tax planning. We are aware of the limitations that Inheritance Tax rules can place on the use of trusts in wealth management and the need for some clients to consider Family Investment Companies as an alternative tool of their wealth and succession planning.

Please get in touch

Email: ku.oc1503304138.sneh1503304138petst1503304138rebli1503304138g@xxx1503304138 or contact our Trusts and Settlements team.


Deborah Langham 5
Deborah Langham

Private Client Paralegal / Legal Assistant
Exeter | Sidmouth
email | 01392 424242 | 01395 512443

INDIVIDUALS, Lasting Powers of Attorney, Wills, Trust, Probate & Tax, Court of Protection, Trusts & Settlements, Wills & Estate Administration, Inheritance Tax Planning

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Richard Walford
Richard Walford

Partner - Head of Department Private Client
Exeter | Crediton
email | 01392 424242 | 01363 775566

INDIVIDUALS, Elderly Client, Lasting Powers of Attorney, Wills, Trust, Probate & Tax, Trusts & Settlements, Wills & Estate Administration, Inheritance Tax Planning, Step Members

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Claire Veness
Claire Veness

Supervising Partner Sidmouth Office
Sidmouth
email | 01395 512443

INDIVIDUALS, Elderly Client, Lasting Powers of Attorney, Wills, Trust, Probate & Tax, Court of Protection, Trusts & Settlements, Wills & Estate Administration, Inheritance Tax Planning, Step Members

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Don Middlemost
Don Middlemost

Supervising Partner Budleigh Salterton
Budleigh Salterton
email | 01395 445581

INDIVIDUALS, Elderly Client, Lasting Powers of Attorney, Wills, Trust, Probate & Tax, Court of Protection, Trusts & Settlements, Wills & Estate Administration, Inheritance Tax Planning

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Liz Govier
Elizabeth Govier

Supervising Solicitor Ottery St Mary Office
Ottery St Mary
email | 01404 812228

INDIVIDUALS, Elderly Client, Lasting Powers of Attorney, Wills, Trust, Probate & Tax, Court of Protection, Trusts & Settlements, Wills & Estate Administration, Inheritance Tax Planning, Step Members

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Tim Leat
Tim Leat

Chartered Legal Executive
Ottery St Mary
email | 01404 812228

INDIVIDUALS, Elderly Client, Lasting Powers of Attorney, Wills, Trust, Probate & Tax, Trusts & Settlements, Wills & Estate Administration, Inheritance Tax Planning, Step Members

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Nysha Forsey
Nysha Forsey

Solicitor
Crediton
email | 01363 775566

INDIVIDUALS, Elderly Client, Lasting Powers of Attorney, Wills, Trust, Probate & Tax, Court of Protection, Trusts & Settlements, Wills & Estate Administration, Inheritance Tax Planning, Step Members

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Claire Hogg   Final Approved 1484 E
Claire Hogg

Chartered Legal Executive
Exeter
email | 01392 424242

INDIVIDUALS, Wills, Trust, Probate & Tax, Trusts & Settlements

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