More information about Trusts and Trustees
Trusts offer flexibility in how assets are distributed.
The trust can set out in detail how the estate is to be distributed not only to who but how much and at what age. This flexibility can be helpful when there are beneficiaries who are unable to manage money or who can’t be relied on to make sound financial choices, so that a trust may distribute in instalments to avoid the beneficiary spending all the money at once. A trust can also specify how funds can be spent, for example on rent, food, healthcare, and other necessary or unexpected expenses
A trust can provide more protection than a will should there be a legal challenge from any party not happy with the distribution of the assets.
The legitimacy of a trust is difficult to challenge as the litigant has to claim that the person setting up the trust, the Settlor, was mentally incapacitated when setting up the trust — basically, that the Settlor didn’t have the ability to fully understand the responsibilities, risks, benefits and other aspects of setting up the trust; or that the Settlor was under duress or “undue influence” when setting up the trust — and didn’t do so freel
Trusts can be designed to pay for the future education of children or grandchildren.
The flexibility of the trust structure allows for a person to determine whether beneficiaries will share equally or in proportion to their educational needs. Usually, an education trust will specify that each child’s full tuition and further education expenses are paid, after which any remaining assets in the trust can be split evenly among all of the children. However, it can be adapted to ensure that ultimately the same amount is distributed to each child if this is preferable to the Settlor
Trusts can be an effective method of ultimately donating to charitable organizations.
A Settlor can assign assets such as money, property or art into a trust, and require that they eventually be given to a specific organization. In the meantime, the Settlor can continue to enjoy the property, a relevant factor if the assets in question are a second home or painting. There can also be immediate and future tax benefits with this type of structure
Trusts can provide a tax-efficient structure for an Estate.
Assets permanently gifted into a Trust can often be subject to beneficial tax rates and may not be subject to certain taxes which may be incurred if those same assets were transferred directly to the beneficiary after death. This is a complicated area and Courmacs can refer you to specialist tax advisors to ensure that you can benefit from the most appropriate Trust structure
Trusts can pass wealth on efficiently and privately.
The process of probate may take a year or more, during which time assets may not be easily accessible to pay for funeral arrangements and other expenses. Further, probate is a matter of public record which may be lead to your Estate’s assets being known resulting in beneficiaries receiving unwanted publicity or solicitations. After your death, a trust can act like a will which enables the trustee to privately and quickly settle your estate without going through the probate process
A Trust can help you manage your affairs if you become incapacitated.
This can be achieved with a revocable living trust which will specify the trustee who will manage it. This avoids the situation family or close friends or strangers even needing to go through the extensive paperwork to obtain a court appointed guardianship. Instead you get to choose who will manage not only your affairs, but also those of any beneficiaries you’ve been providing for
Trusts can be structured to mitigate possible conflict between heirs when an Estate is being settled.
Trusts can be tailored to the Settlor’s needs, detailing exact items and monetary amounts to be left to each beneficiary. This can be particularly helpful when dividing items that family may argue over, or items that may have sentimental value. With all of the specifics spelled out, heirs have little reason to argue over “who gets what.” Wills also provide this but in complex family situations or where there are substantial assets, Trusts provide more precision
Let Courmacs act for you
Courmacs will take the time with you to discuss the options and find the right answer for you.