Trusts in Wills and What They Can Do for You
19 October 2018
A Trust Will can protect certain assets for future generations, by distributing them into a legal structure called a Trust. Trusts can be used in a number of ways to ensure that your assets are passed on to your loved ones in the way that you want.
Types of Trusts in Wills
There are several types of Trusts which can be included in Wills for different purposes such as:
We explain below how each of these can be used to protect your assets for future generations.
What Are Trusts Used For?
There are a number of situations in which it can be beneficial to include a Trust in a Will. We outline some of the most common situations where a Trust Will can be very useful.
- You want to protect your home against care fees
There's no way of knowing what the future might hold. If you and your spouse or partner own your own home together, including a Property Trust in your Will can help to protect the value of your share in the home from being used, if your surviving spouse is liable for care fees, after you've gone.
In your Will, you can ring-fence your portion of the home into a trust, so that it is excluded from the value of your spouse's Estate for the purposes of means testing when calculating their contribution towards covering their care fees. This means that the value of your share in the property is preserved and can be passed on to future generations
- You have children from a previous marriage who you want to pass your home on to
If you live with your partner or spouse, but you have children from a previous marriage or relationship, it's likely that you will want to pass something on to your children when you die. If you and your partner or spouse own your home together then this may be your biggest asset. However, you will most likely want your partner to be able to live out their days in the house before your share of it is passed on to your children.
A Property Trust in your Will can cater for this, allowing your partner to remain living in the home, but preventing them from being able to re-direct it to someone else, for example, if they remarried and wrote a new Will after your death. Your portion of the property value will be protected and can ultimately passed on to your children.
- You want to leave a gift to someone who is vulnerable, receiving state benefits, under 18 or unable to manage their own finances
When you leave a gift to someone in your Will, it's important to consider all of the potential consequences of this. If a Beneficiary of your Estate is disabled, for example, and is receiving state benefits, then leaving them a significant sum of money could compromise their entitlement to benefits, potentially placing them in financial strife in the future.
It's also important to recognise if any of your Beneficiaries are not capable of managing their own finances. If not, then making a Will with a Discretionary Trust can help to safeguard their inheritance for them. You can place their inheritance into a Trust, to be managed by Trustees that you choose.
- You have cash assets and investments which you want to leave to your partner, but you ultimately want these to pass to your children
If you have cash assets and investments, you may want your partner to benefit from the income generated by these investments after you die. However, you might ultimately want to ensure that the capital of these investments passes to your children when your partner dies. This is where a Life Interest Trust comes in.
This works in a similar way to a Property Trust, in that it allows someone (ie your partner) to benefit from these assets during their lifetime, but if your partner remarries in the future or writes a new Will, these assets will be protected.
How Much Do Trust Wills Cost?
With Co-op Legal Services, we offer fixed fee Trust Wills. A Single Trust Will costs £378 including VAT. Mirror Trust Wills (so 2 Trust Wills for a couple) cost £504 including VAT. This price includes free storage of your Will for life.
Our experienced Will Writers can talk you through the types of Trust Will available and advise you on the best option for your personal circumstances.