What are trusts, how do they work?
If you have young children under 18 who you wish to provide for in the event that you, and your partner if you have one pass away, then it is usual to provide for them by way of a trust in the will. This means the situation in which adults, as trustees, look after the children’s assets until the children can take control of them themselves.
The Trustees appointed by you can then provide your nominated children’s Guardian(s) with sufficient funds to care for your children until they reach 18 when they will inherit, or such later age as you specify.
While you may choose a later age at which they should inherit, if your child is not disabled there may be additional taxes to pay on the trust fund, subject to the amount held in the trust fund.
There are several types of trust for use in different scenarios which can hold assets including cash and property in safe keeping for your beneficiaries. For clarity though, trusts within wills, and stand alone trusts should not be viewed as a method of evading tax, their use can in some cases help to avoid some of the harsher impacts of inheritance tax, but essentially they are to safeguard the asset(s) for the ultimate beneficiary or beneficiaries. Historically trusts have been in use for over 600 years helping families keep assets with their bloodline for decades.
