Lifetime Trust Planning
Your Will should usually be the foundation of your estate planning. Once that is in place, lifetime trust planning can help you consider further ways to preserve family wealth, make gifts more protectively and provide greater control over important family assets during your lifetime.
For some families, this may include Family Gift Trusts, Probate Preservation Plus Trusts (PPPTs) and other planning designed to work alongside the provisions in their Wills.
Planning Beyond Your Will
Lifetime trust planning may help with:
Making gifts in a more controlled and protected way
Reducing potential Inheritance Tax exposure where appropriate
Preserving family wealth for future generations
Providing additional protection for beneficiaries
Protecting against risks such as divorce, creditor or bankruptcy claims
Helping reduce a beneficiary’s own future Inheritance Tax exposure
Providing greater control over how and when assets are used
Reducing probate delays in certain circumstances
Creating a joined-up estate planning structure
Family Gift Trusts
A Family Gift Trust allows you to make a gift during your lifetime while placing the assets into trust rather than transferring them outright to a beneficiary.
This can be useful where you want to support children or grandchildren but would prefer trustees to retain control over how and when the assets are used. Trustees may, for example, make loans, manage funds for younger beneficiaries or use trust assets to assist with a property purchase.
Where the planning is undertaken for Inheritance Tax purposes, the person making the gift is generally excluded from benefiting from it. The gift may also start the relevant seven-year period for Inheritance Tax purposes, subject to the value of the gift, the available allowances and the rules applying at the time.
Holding assets within trust may also provide additional protection for beneficiaries against future divorce or separation, creditor or bankruptcy claims, care-fee exposure and their own Inheritance Tax position.
Probate Preservation Plus Trusts
A Probate Preservation Plus Trust, usually referred to as a PPPT, is a lifetime trust arrangement relating principally to the family home.
It allows the property to be transferred into trust while you continue to live there and is generally best suited to property that is owned without a mortgage.
A PPPT may help reduce probate delays relating to the property and can provide greater control over how the home is managed and ultimately passed on. It may also provide additional protection for beneficiaries against risks such as divorce, creditor or bankruptcy claims and their own Inheritance Tax exposure.
The trust can be structured so that the Residence Nil Rate Band may still be available where applicable, but a PPPT is not an Inheritance Tax saving arrangement for the person placing their home into trust, because they continue to benefit from the property by living there.
Care Fees and Asset Protection
A PPPT should be viewed as a long-term estate-planning and asset-protection arrangement, not as a means of deliberately avoiding future care fees.
Where care-fee assessments later become relevant, a local authority may consider the circumstances that existed when the trust was established, including the client’s age, health, foreseeable care needs and the reasons for carrying out the planning.
For that reason, no trust can guarantee that a property will be disregarded in a future care-fee assessment, and the rules relating to deliberate deprivation must always be considered.
Is Lifetime Trust Planning Right for You?
Lifetime trusts are not appropriate for everyone. Their suitability depends on your assets, family circumstances, objectives and the reasons for considering the planning.
During your consultation, I will explain the available options, how they work alongside your Will, their potential benefits and limitations, and whether lifetime trust planning is appropriate for your circumstances.
Clear Advice Before Any Decision
Lifetime trusts are not suitable for everyone. The right planning depends on your age, health, family circumstances, property, assets and overall objectives.
I will explain the options clearly, including whether lifetime trust planning is appropriate or whether your Will-based planning already gives your family the protection they need.
Online Estate Planning Across England and Wales
I provide lifetime trust planning guidance online across England and Wales, helping clients understand their options from home in a clear and straightforward way.
