Trusts

Although Trusts (also called Settlements) can and are created by a Will it is more usual for Trusts to be made during life time. Trusts are of various types, the most common being:-

Life Interest Settlements. These Trusts provide for the income to be paid to a beneficiary, usually for life, with the capital passing to other beneficiaries on his or her death.

Accumulation and Maintenance Settlements. These are Trusts usually made for the benefit of children or grandchildren and enable payments to be made for maintenance or benefit with the interest accumulated until it is needed. Under this type of settlement a beneficiary must become entitled to at least the income before attaining the age of 25 years.

Discretionary Settlements. These are Settlements for a wide class of beneficiaries with the trustees being given power to select from that class if and when they decide whether anyone should receive any payment of income or capital. Discretionary Settlements are useful where it is intended to keep as much flexibility as possible and also to keep the settled funds outside a beneficiary's estate, thereby reducing any inheritance tax liability.

Specialist Trusts. These are Trusts created for specific purposes and include Special Needs Trusts which in the case of personal injury claims can preserve DSS Benefits which would otherwise be lost.

Charitable Trusts. These are Trusts created for charitable purposes only and may be for one or more Charities or for charitable purposes generally.

Death in Service Settlements. In certain circumstances it is possible to arrange death in service and pension policy death benefits in such a way so as to enable the surviving spouse to have the income and access to the capital without there being any inheritance tax payable on the benefits on his or her subsequent death.

Enduring Powers of Attorney

An Enduring Power of Attorney will remain effective even if you become mentally incapable of dealing with your affairs.

Where there is mental incapacity and there is no Enduring Power of Attorney in place it may be necessary to apply to the Public Guardianship Office for the appointment of a Receiver. This is a lengthy and expensive procedure and can result in substantial ongoing Court and other fees.