Discussion
Does anybody know anything about family trusts?
If I croak, I wouldn’t be comfortable with my kids inheriting my stash at 18. I might also like some control from beyond the grave to try to benefit future generations and ensure it isn’t all lost in divorces.
Also it could be an options as a means of legally reducing inheritance tax.
I assume the pot has to be big enough to justify all of the expense and complexity, but is there a number where it starts to become viable or sensible?
I will speak to a professional but interested in any experiences here.
If I croak, I wouldn’t be comfortable with my kids inheriting my stash at 18. I might also like some control from beyond the grave to try to benefit future generations and ensure it isn’t all lost in divorces.
Also it could be an options as a means of legally reducing inheritance tax.
I assume the pot has to be big enough to justify all of the expense and complexity, but is there a number where it starts to become viable or sensible?
I will speak to a professional but interested in any experiences here.
dmahon said:
Does anybody know anything about family trusts?
If I croak, I wouldn’t be comfortable with my kids inheriting my stash at 18. I might also like some control from beyond the grave to try to benefit future generations and ensure it isn’t all lost in divorces.
Also it could be an options as a means of legally reducing inheritance tax.
I assume the pot has to be big enough to justify all of the expense and complexity, but is there a number where it starts to become viable or sensible?
I will speak to a professional but interested in any experiences here.
It will cost you 5-7k for something relatively uncomplicated. Just make sure there is some discretion around the trust and you pick the trustees wisely otherwise you could have the money just sat there doing nothing for years If I croak, I wouldn’t be comfortable with my kids inheriting my stash at 18. I might also like some control from beyond the grave to try to benefit future generations and ensure it isn’t all lost in divorces.
Also it could be an options as a means of legally reducing inheritance tax.
I assume the pot has to be big enough to justify all of the expense and complexity, but is there a number where it starts to become viable or sensible?
I will speak to a professional but interested in any experiences here.
Tbh, I doubt anyone is going to be able to give you a simple £x answer as the number is going to depend on how much you value the control (and other trust benefits), what sort of assets the trust will hold (which impacts valuation and tax), where the assets are going to come from, how long you envisage the trust being in place (there can be periodic tax charges), the nature and extent of any non-trust assets, etc.
If you were below the £325k threshold for IHT then you probably wouldn’t do it primarily for tax reasons but you might want to if some of the other things you raise as being of interest were of greater concern/value to you than the costs you’d incur. Of course if there are two of you there’s nothing stopping each of you putting £325k into trusts and adding to this over time.
If you’re wanting to have it hold assets that are harder to value, or there are more active elements to the trust, then the setup and operational costs and complexity are going to increase (which, obviously, makes such an arrangement harder to justify on purely economic grounds).
People often focus on the perceived tax benefits but worth remembering that HMG tries to make trusts tax neutral vs direct holdings. Yes, there can sometimes be benefits but with the admin/cost burden eating away at (or maybe even exceeding) these it does need some careful consideration. After all, if it were a simple way to avoid tax then everyone would be doing it.
If you were below the £325k threshold for IHT then you probably wouldn’t do it primarily for tax reasons but you might want to if some of the other things you raise as being of interest were of greater concern/value to you than the costs you’d incur. Of course if there are two of you there’s nothing stopping each of you putting £325k into trusts and adding to this over time.
If you’re wanting to have it hold assets that are harder to value, or there are more active elements to the trust, then the setup and operational costs and complexity are going to increase (which, obviously, makes such an arrangement harder to justify on purely economic grounds).
People often focus on the perceived tax benefits but worth remembering that HMG tries to make trusts tax neutral vs direct holdings. Yes, there can sometimes be benefits but with the admin/cost burden eating away at (or maybe even exceeding) these it does need some careful consideration. After all, if it were a simple way to avoid tax then everyone would be doing it.
MarcelM6 said:
I set one up (many years ago) to ensure my widow's future ex-husband can't get any of my money ahead of the kids. Think it cost under a grand, can't imagine it will be much more than double that now.
In my case there's no tax benefit, just a way of controlling beneficiaries
The pass through. In my case there's no tax benefit, just a way of controlling beneficiaries
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