Q) Will I benefit from having a trust?
A) A trust may or may not benefit you. A good way to find out if a trust will help you in your current situation is to explain your situation to your bank and ask them.
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Q Is a living trust the only document needed to handle my estate in the case of my death?
A No. You still need a will in order to transfer to the trust fund any assets that you didn’t before you died so that they can be distributed as part of the trust, or in the case that a testamentary trust is desired then you will need to include all the options for the trust to be created in the will.
Q Does a living trust save taxes?
A No. Only irrevocable trusts protect you from taxes and save you the money. If you are setting up a trust for tax purposes, then the taxing that you are saving yourself from is your estate being taxed after you die and before it is handed over to your children or whatever beneficiaries you have chosen.
Q Are living trusts hard to set up?
A A trust is a little bit more work to create than a will, but it is still fairly simple. The main difference between setting up a trust and setting up a will is that you have to transfer the funds over to the trust, but with a will the transfer does not take place until after you are dead. If assets aren’t in the trust when you die, it’s basically useless, unlike with a will. The bank or trust company will still help you all the way through setting up your trust so you will be OK.
Q Who should I appoint as my trustee?
A House clearance Halifax reccomends you should set yourself up as your own trustee, or set a financial institution as trustee. This way you retain full control of your assets as long as you are able to manage your own affairs. You can appoint your spouse or the financial institution as your successor trustee, so they can take over in the event that you cannot continue as trustee. When you die all trusts become irrevocable and the trustee distributes the assets as the trust document specifies or keeps them in trust for the beneficiaries, if that is what the trust says to do.
Q Who can help me draft a trust?
A A good custom trust can be drafted by a lawyer, and should not be drafted by the person pushing you to buy a trust as the only solution to all of your financial management concerns. You can have the agents at the bank or trust companies help you as well. If your trust is not too complicated then you can do it yourself using software on your own personal computer, or even by hand. The cost of a trust depends on the going rates where you live and the complexity of what you want done, but you can expect to spend about £500 on a married couples trust plan that includes a will and having a financial institution as the trustee of your assets.
Q Are there any suitable Government websites dealing with inheritance tax?
A The websites below will point you to websites dealing with inheritance tax.
Q Are there any advisory groups that specialise in probate law?
A Law Society’s Probate Section is an advisory group that specialises in probate law. You can email them at firstname.lastname@example.org, or you can find a local specialist solicitor using the following website:
Q Is there a legal obligation for the trustees to fulfil the conditions specified in the terms of the trust?
A It’s really your choice as the settlor. Remember that you make the rules for your own trust. The amount of flexibility that you give your trustees is your choice. You may have them legally bound to do exactly as the text says, or you can have a clause that says they can do whatever they want. You can make it say “give Johnny £10,000 when he turns 21, if you think he deserves it”. It is really up to you.
Assets are what is being protected and distributed by your trust. An asset can be cash, property, investments, bonds, stocks, cars; anything of value can be considered an asset and protected/distributed by the terms in the trust agreement.
A bank is an organization that looks after money and lends money to others. They can loan money for business, cars, houses, etc. They make their money from interest that you pay on the loans they give you. These companies often provide trust services.
Bonds are a form of investment that are usually sold by the government and provide a small gain. They are often given as gifts, and are not really a serious form of investment.
Funds are cash that can be protected under the trust. Property and investments are not considered to be funds.
When loans are given usually there is interest on them. This means that the person the money was loaned has to be paid back to the original owner, along with a predetermined borrowing fee. The fee is usually a percentage of the original amount.
Investments are money that has been invested in order to grow and make more money for its owner. Investments are a good source of income after you are retired or if you have nothing to do with your savings.
An irrevocable trust is a trust which cannot be changed or cancelled once it is set up without the consent of the beneficiary. Contributions cannot be taken out of the trust by the settlor. Irrevocable trusts offer more tax advantage that revocable trusts don’t, by enabling a person to give money away even before they die.
A revocable trust is a trust that can be changed or cancelled by its settlor or by another person. While a trust is still revocable it does not avoid estate taxes, which is why most trusts are Irrevocable after the settlor dies. Revocable trusts are the opposite of irrevocable trusts. Revocable trusts are the opposite of revocable trusts.
The settlor is the person that starts the trust and owns the assets before the trust is set in place. They are responsible for choosing the trustees and beneficiaries. They set up the trust with all the options they desire. It is considered to be the settlor’s trust fund.
A trust is an agreement in which assets are protected and given out to beneficiaries at a later date or after a specified event, such as marriage, graduation, or death. Trusts are a safe place to store assets and have many benefits.
The trustee is the person who legally owns the assets after the settlor has entrusted them with the assets. The trustee is usually a bank or Trust Company, but it can be a single person if the settlor wishes.