What is a Trust?

A Trust is a way of enabling someone to benefit from an asset with legally being an owner of the asset. A trustee is appointed to manage the Trust.

A Trust allows you to influence the way the asset can be used in the future. Having a Trust in place ensures that the inheritance of a family member is:

- Secured and will not be wasted against someone who has mental health issues or addiction problems.
- Reducing tax liabilities such as inheritance tax and care home fees - In case of future divorce settlements, a Trust will prevent an asset from being dispersed over future decades.

There are various kinds of Trusts which should be considered. These can be:

- Bare Trusts: the simplest form of Trust which involves the beneficiary having immediate right to benefit from the capital and income of the asset.
- Life Interest Trusts: this Trust entitles the individual to have the use and benefit of an asset during their lifetime but without being able to sell it. For example, this form of Trust is one of the most secure for children as the surviving partner can continue to live in the home but without the right to sell it allowing for the proceeds to benefit a new partner.
- Discretionary Trust: this form of Trust gives the trustees the maximum flexibility over the way they use the capital and income of the asset. The biggest advantage of this being that it allows the trustees to adapt to changing circumstances and ensure funds are directed to where they are most needed.

Please enquire with the LUX team for further information and secure your peace of mind for yourself and your loved ones.