Trusts

Protecting assets and providing for the people who depend on you

Sometimes, deciding who should inherit your assets is only part of the picture. You might want to provide for a child who is too young to manage an inheritance, support a vulnerable family member or make arrangements that balance the needs of different people in your family. You may also want to think carefully about how property, investments or business interests should be managed for the benefit of others.

A trust can be one way of achieving these objectives, but it’s important to understand how it works and whether it’s appropriate for your circumstances.

At The Jonathan Lea Network, we’ll take the time to understand what you’re trying to achieve, explain the options in plain English and help you make informed decisions about how your assets should be held and managed. If you already know what you need, email wewillhelp@jonathanlea.net or fill out our form and we’ll call you back.

What is a trust?

A trust is a legal arrangement in which assets are held and managed by people known as trustees for the benefit of others, known as beneficiaries. The assets might include money, property, investments or other interests. The trust document sets out how the assets are to be managed, who may benefit and the powers and responsibilities of the trustees. Trusts can be created during someone’s lifetime or through their will. They can be useful in particular circumstances, but they also involve legal responsibilities, potential tax consequences and administration requirements.

A trust isn’t automatically the right solution for everyone. We’ll help you understand whether one is appropriate and what alternatives you may want to consider.

When might a trust be useful?

Providing for children and younger beneficiaries: You may want to leave money to children or grandchildren but feel that they shouldn’t receive full control of a substantial inheritance at a young age. A trust can provide a structure for assets to be managed on their behalf, with the terms determining how and when they can benefit.

We’ll explain the available options and how they could work alongside your will.

Supporting a vulnerable family member: If someone you care about has a disability, additional support needs or difficulty managing their finances, you may be concerned about how to provide for them over the longer term. Certain trusts can allow assets to be managed for their benefit rather than being transferred to them outright. The appropriate structure will depend on the individual’s circumstances, including any means-tested benefits, care arrangements and tax considerations.

Providing for a partner while considering your children’s inheritance: In families involving second marriages, blended families or children from previous relationships, you may want to balance the needs of your current partner with those of your children. For example, you might want your partner to be able to live in the family home while ensuring that your share of the property ultimately passes to your chosen beneficiaries. Depending on your circumstances, a trust within your will may help achieve that outcome.

We’ll explain how such arrangements work, including their limitations and the implications for everyone involved.

Managing property or family assets: Trusts may also be relevant where property or other assets are to be held for particular beneficiaries or managed over a period of time. The suitability of a trust depends on matters such as ownership, the intended beneficiaries, tax treatment and the degree of flexibility required.

We can help assess whether a trust is needed and how it should be structured.

Different trusts serve different purposes

You may have come across terms such as discretionary trust, life interest trust or family trust, but it’s not always obvious what they mean or which arrangements might be right for you.

Different trusts can help achieve different things, from providing for young children to managing property or supporting loved ones over the longer term.

Some of the arrangements we can advise on include:

• Life Interest Trusts – Can provide someone with an entitlement to income or another specified benefit, such as the right to live in a property, while preserving assets for other beneficiaries in the future.
• Discretionary Trusts – Allow trustees to decide how and when beneficiaries receive financial support, providing flexibility where family circumstances or needs may change.
• Bereaved Minor Trusts – Can provide for children who have lost a parent, with assets managed by trustees until the child becomes fully entitled to them by age 18.
• 18-to-25 Trusts – Can allow qualifying assets inherited following a parent’s death to be managed for a young person’s benefit until they become fully entitled, no later than age 25.
• Bare Trusts – Allow assets to be held and managed by trustees for a beneficiary who is entitled to them outright, including arrangements for children who are not yet old enough to take control.
• Trusts for Vulnerable Beneficiaries – Can help provide long-term financial support for someone with a disability or other qualifying needs, with particular tax treatment potentially available where statutory conditions are met.
• Property Trusts and Declarations of Trust – Can be used to establish or record beneficial interests in property, clarify ownership arrangements and provide a framework for how property interests are held or managed.

You don’t need to know which type of trust is suitable before speaking to us.

Our role is to understand what you want to achieve and explain whether a trust could help.

What should I consider before creating a trust?

Trusts can provide valuable flexibility or protection in suitable circumstances, but they shouldn’t be entered into without understanding the practical consequences.

Some important questions include:

Who will act as trustee? Trustees have legal responsibilities and may need to make decisions, maintain records, deal with tax reporting and manage assets over many years.

How much control will I retain? Transferring assets into a trust can affect who legally owns and controls them. The position depends on the structure and terms of the trust.

What are the tax implications? Creating and operating a trust may have implications for Inheritance Tax, Income Tax and Capital Gains Tax. Some trusts also require registration with HMRC.

What will it cost to establish and maintain? There may be legal fees, tax compliance costs and ongoing administration expenses.

We’ll explain these considerations before recommending a particular arrangement.

How can The Jonathan Lea Network help?

Our private client team advises on the creation and administration of trusts, including arrangements made during your lifetime and trusts established under wills.

We can help you:

• Understand whether a trust is appropriate for your objectives.
• Consider the different types of trust available.
• Identify suitable trustees and explain their responsibilities.
• Prepare appropriate trust documentation.
• Understand relevant tax and administration implications.
• Review existing arrangements where circumstances have changed.
• Obtain advice on trustee responsibilities and the administration of trusts.

Where trusts form part of wider estate planning, we can also consider how they interact with your will, property ownership and inheritance tax position.

How does the process work?

1. We understand your objectives: We’ll discuss what assets are involved, who you want to benefit and what concerns you’re hoping to address.

2. We explain your options: We’ll consider whether a trust is appropriate and, if so, which arrangements may be suitable. We’ll also explain potential disadvantages and alternatives.

3. We agree the structure and costs: Before proceeding, we’ll outline the proposed legal work, anticipated costs and any relevant tax or administration considerations.

4. We prepare the documentation: We’ll prepare the documents required to establish the trust and explain the steps necessary to bring the arrangements into effect.

5. We explain what happens next: Depending on the trust, there may be assets to transfer, registration obligations or ongoing trustee responsibilities.

Let’s find the right arrangements for your circumstances

You may already know that you want to establish a trust, or you may simply be trying to find a suitable way to provide for someone you care about.

We’ll listen to what you want to achieve, explain the practical choices and help you decide whether a trust is the right approach.

Talk to our Trusts team.

Tell us a little about your circumstances and we’ll explain how we may be able to help.  Contact us HERE or email wewillhelp@jonathanlea.net today.