Setting-up a trust can be difficult, that's why Abacus are ready to assist
A trust is a legal arrangement where one or more people or a company (called the trustees) controls money or assets (called the trust property), which they must use for the benefit of one or more people (the beneficiaries).
You can put money, investments, or other assets into the trust. Depending on the type of trust you use, it might have to pay tax and the trustees might need to complete tax returns.
Why Choose Abacus?
Trust funds can be used for a number of reasons; protecting family assets, passing assets on whilst you’re still alive, leaving inheritance to minors (children under the age of 18), or to those who lack the capacity to handle their own affairs.
As we know that setting up a trust fund can be a difficult and sometimes daunting task, we provide a bespoke and comprehensive service that covers all areas required to set up a trust fund. As there are many different types of trusts, including living trusts and pilot trusts, we can assess your individual needs and circumstances to create a trust fund that is right for you.
Whether you know exactly what types of trust funds you’d like to set up, or if you haven’t quite got that far yet, our team of specialists can come to visit you in the comfort of your own home at your convenience, to discuss this with you.
We will ensure that any document we create for you is low cost, competitive and we’ll endeavour to beat any quote from elsewhere, all whilst maintaining our professional standards.
Different Trust Funds
Will Trusts
Will trust, is a trust that is written within your Will document. It helps protect your assets and loved ones by addressing potential vulnerability in your estate. For example, if you have children from a previous relationship, property you wish to protect or a vulnerable beneficiary, adding a will trust would be beneficial.
Living Trusts
Created by you, a living trust is a legal document that is made during your lifetime. Similar to a Will, a living trust highlights what you would like to do with regards to your assets, heirs, and any dependents you may have (children under the age of 18 or an elderly parent or grandparent for example). However, unlike a Will, which only comes into effect after you die, a living trust bypasses the probate process and your appointed successor trustee (the person who takes over your position as trustee) will carry out the instructions you have documented in your living trust, on your behalf.
Pilot Trusts
A pilot trust is set up during an individual’s lifetime and is a type of discretionary trust. Opened with as little as one pound, assets can be added to the trust at a later stage during the individual’s lifetime, or even on death through a legacy in their Will. It is also possible for an individual to open more than one pilot trust fund during their lifetime. These are suitable for estates up to £2million.
Though tax will still need to be paid on the deceased’s estate, the more pilot trusts made during their lifetime, the less tax that would potentially need to be paid. Currently, the ‘nil rate band’ (NRB) for an estate is £325,000 (this is the first £325,000 of an estate which does not get taxed), if pilot trusts are made; however, they will each benefit form their own NRBs. This is particularly ideal for larger estates.
However, a pilot trust will have its own inheritance tax system: every ten years there will be a charge of up to 6% as well as an ‘exit charge’ for removal of assets from the pilot trust, unless the value of the trust remains below the NRB of £325,000, in which case there will be no charge.
Residency Trusts
Allows someone such as your partner to continue living in your solely owned property, either for life or for a period of time, whilst ultimately keeping it safe for someone else such as your children.
Property Protection Trusts
Allows someone such as your partner to live in, or have a beneficial use of your property (or a share of it) for life, whilst ultimately keeping it safe for someone else such as your children.
Life Interest Trusts
Allows someone such as your partner to continue living in your solely owned property, either for life or for a period of time, whilst ultimately keeping it safe for someone else such as your children.
Life interest Trust also allows you to protect the capital of any property, cash assets and other investments for you ultimate beneficiaries, such as your children, whilst giving the income to your spouse or partner for life.
Vulnerable Person Trusts
Allows you to leave assets for the benefit of a vulnerable beneficiary (e.g. someone with a learning disability) to be held by the chosen trustees who can protect the beneficiary from being taken advantage of.
Frequently Asked Questions
What’s the actual difference between a discretionary trust and a life interest trust?
A discretionary trust gives trustees control over how and when beneficiaries receive income or capital, while a life interest trust guarantees a named beneficiary income or use of an asset for life, with the capital passing to others afterwards.
Is setting up a trust worth it for an ordinary family, not just the wealthy?
Setting up a trust can be worthwhile for an ordinary family, not just the wealthy, particularly to protect a family home, provide for young or vulnerable beneficiaries, or control how an inheritance is used.
How much does it cost to set up a trust properly in the UK?
Setting up a trust properly in the UK typically costs from around £500 to £2,000 or more, depending on its complexity and whether it involves property or ongoing tax and administration advice.
What are the pros and cons of putting my house into a trust in the UK?
Putting your house into a trust can protect it from care fees or family disputes and control who inherits it, but it can also trigger tax charges, limit your control over the property, and add ongoing administration.
Can I set up a trust for a grandchild who’s still a minor in the UK?
Yes, you can set up a trust for a grandchild who’s still a minor, with trustees managing the assets on their behalf until they reach an age you specify in the trust deed.
How do I choose the right trustees for my trust in the UK?
When choosing trustees, pick people you trust to act responsibly and fairly, who understand your wishes, are willing to take on the administrative duties involved, and ideally include at least one professional trustee for complex trusts.
What’s a pilot trust and when would I actually need one?
A pilot trust is a trust set up with a nominal sum during your lifetime, ready to receive further assets later, such as death benefits from a pension or life policy, often used to keep those funds outside your estate.
How long does it take to set up a trust from start to finish in the UK?
Setting up a trust from start to finish typically takes a few weeks, covering initial advice, drafting the trust deed, and formally transferring assets, though more complex trusts can take longer.
Can a trust be changed or dissolved once it’s set up in the UK?
Whether a trust can be changed or dissolved depends on its type; discretionary trusts often give trustees some flexibility, but many trusts, once properly established, are difficult to unwind without specific powers built into the deed.
Enquire Now About Setting-up A Trust
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