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Trusts, wills and executorships

Trusts, wills and executorships

This is a large and far-reaching topic so we'll just deal with some basics in this post.

Trusts

When you set up a trust, you become the trust settlor. The assets you place into the trust become the trust property. The people you choose to manage the trust are the trustees. And those who will benefit from the trust property are beneficiaries.

Trusts have two main uses in estate planning:

1.       They allow you to leave assets in a tax-efficient, protected way to vulnerable beneficiaries (those with a mental or physical disability or children under the age of 18)

2.       You can have your life insurance policy written into trust so that it sits outside of your taxable estate and provides a lump sum to your family when you die.

There are a number of different trust types, which are each suitable in certain situations and are subject to different tax treatment.

Wills

A Will allows you to decide who will benefit from your wealth when you die and who will distribute it. If you die without leaving a Will, you die 'intestate' and your estate is distributed according to intestacy laws.

Anyone who owns property, a car, investments, business interests, retirement savings, collectibles or personal belongings should have a Will.

You should review your Will from time to time, especially if beneficiaries die or new beneficiaries are born. Marriage and divorce also affect the application of your Will and a review is sensible in the event of either.

Executorships

An executor is somebody named by you to carry out your wishes when you die. Before choosing someone as your executor, give serious consideration as to how well he or she will be able to handle the duties and responsibilities of the role.

Contact Tracy or Geoff on 01628 631056 if you need any further guidance.