- PART 1
Protecting your assets with a living trust
Everybody wants to protect their assets for the benefit of their loved ones. People are motivated to provide for their children throughout their lives and want what is best for them. Many people will draft a Will hoping to ensure that the assets that they have worked hard to acquire during their lifetime, are passed on to their children and chosen beneficiaries after their death.
Need help with a living trust?
Our friendly specialists are here to help you and can offer information and a free, no-obligation quote over the phone.
A Will
A will can only dispose of the assets that you own at the date of your death and if the value of these is eroded during your lifetime, there will be little if anything left for your beneficiaries to inherit.
Lifetime Living Trusts
Lifetime Living Trusts are specifically tailored to protect your assets for you during your lifetime. They give you the peace of mind that your estate can be passed on securely and intact to your spouse, your children, and their bloodline, or other named beneficiaries, after your death.
A Living Trust is a lot like a Will, in that you set out your wishes about your assets and your heirs.
However, a Will only becomes effective when you die and after the probate process. A Living Trust is effective while you are still alive.
You can place many assets into a Living Trust, such as property, savings, and investments.
The Trustees will take control of the assets immediately, which can be very beneficial to you and your family in certain circumstances.
During Your Lifetime
Once the Trust has been created, you can use it to ‘ring-fence’ your assets. Most people will protect their home and their savings, leaving the capital in their bank or other savings accounts for ongoing living expenses. Income from savings protected within the Trust can be paid directly into your bank account to supplement the income from earnings or pensions.
What Will A Living Trust Do For Me?
Just like a safety deposit box, assets can be added and removed from the Trust during your lifetime. If you have large expenses that cannot be met out of normal income, like a new car, holiday, or house repair, the appropriate sum can be transferred to your bank account from the Trust.
You are named as the ‘Principal Beneficiary’ of the Trust and retain full control of the assets within the Trust while you are alive and have mental capacity. You are free to move home or release equity from the Trust at any time.
As the Principal Beneficiary of the Trust, you have a guaranteed right of occupation in the property for the remainder of your life. The Trustees, usually your children, cannot evict you under any circumstances.
You can direct the Trustees to sell the property and to buy a new property of your choice. If the new property you are acquiring is more expensive, the Trustees can only be required to buy the new property if the additional capital required is paid into the Trust by you.
The Trust is equally applicable to married couples and to single people.
If You Lose Mental Capacity
If you lose mental capacity, the law states that you are no longer allowed to manage your own affairs. Assets held within the Trust will then be managed by your Trustees on your behalf. Your Trustees can effectively ‘stand in your shoes’ to make decisions on your behalf but these must be for your benefit. They are able to add or remove assets or use the income from the Trust to help you and improve the quality of your life. Assets held outside the Trust will fall under the control of the courts. Creating a Lasting Power of Attorney will enable the people you choose to manage the assets that you own outside of the Trust.
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