Johnson Legal Trusts & Tax Planning…
Trusts, whether set up in your lifetime to take immediate effect, or written into your Will to take effect on your death, remain an important vehicle in estate planning and wealth/asset preservation. We live in an increasingly complex society. More individuals are choosing to co-habit rather than marry and divorce rates remain high. Step families represent the fastest growing family unit in Scotland today.
Trusts offer protection for your children and assets should your spouse or partner remarry or cohabit with another partner in future. A trust allows assets or funds to be kept safely until the child or children reach an age where they are more financially responsible. Trusts continue to offer the possibility of saving tax, even with the introduction of the transferable nil rate band (which applies only to spouses and registered civil partners, and not to other relationships).
The tax savings for those who own their own businesses or hold certain investments can be extremely valuable.
Trusts can also help to protect means tested benefits for disabled and vulnerable beneficiaries. We have longer life expectancy, but unfortunately not always coupled with good health and the ability to live independently. For those worried about the possible impact of care costs, Trusts offer an opportunity to preserve assets for the family and loved ones.
In 2012 it was recorded that there were 916 care homes in Scotland providing 38,465 places to 33,636 residents of whom 97% were “long stay”. Around one third of residents had been in care for more than three years at an average cost of £632 per week for residential care and £698 per week to include nursing care. These and other factors mean that Trusts are an important consideration whatever your stage in life.
Trusts can be flexible in providing solutions for many individuals, not just the wealthy.
Proper, balanced advice is key to deciding whether a trust is appropriate and what form of trust is right for you. It doesn’t need to be a complicated or expensive process and the benefits should outweigh any costs. We will be happy to show you how.