What is a Will trust?
A Will Trust is usually used as part of your estate planning to create a Lifetime Family Trust (or Discretionary Trust) on your death into which a Nil Rate Band (the value of your estate that is not subject to inheritance tax), can be passed. Additional assets can be passed into the trust but the inheritance tax will be payable.
When writing a Will, clauses can be added to create both a Lifetime Family Trust on death, as well as the legal instruments to pass assets to it. This means that no action apart from drafting a Will is taken prior to death. The clauses are simply written into the Will.
It sounds simple. Is right for me?
It is unlikely. A Will trust may only be worthwhile if you think that your total assets will be under one nil rate band (currently £325,000 – 2010/2011) on the death of the second person if you are married or in a civil partnership.
If you are wealthy retired, a small business owner or part of the millionaire asset group with an asset base currently in excess of £1 million, we believe that you should seek professional experienced Inheritance tax advice before proceeding with this option to see if it’s really right for you. A simple Will can be limiting, for both you, your surviving spouse and your children, and will not make use of some large potential tax savings.
I’ve already got a Will trust written, do I need to do anything?
Yes. You probably need to relook at your Will as laws around Will trusts have altered. If you made your Will prior to April 2007, then you definitely need to reassess it, ideally with the help of an experienced adviser.
Please also take a look at your expected assets for the future. If you think that when you (or both of you if you are married) die that your assets will be valued in excess of the current nil rate band, or indeed, in excess of £1 million, then you really should consider alternative Lifetime Family Trusts. Good Inheritance tax advice and tax advice as part of an overall financial plan are well worth looking into. An experienced Inheritance tax adviser is essential for this. Please call us today.
Got more questions on Will trusts?
If you have any questions, please call us or Email us.
- Increase In Investigations Into Inheritance Tax
- A Sea Change for Landlords?
- What Exactly Are the Tax Implications of a Civil Partnership?
- The long arm of HMRC?
- Could IHT actually be abolished?
- Entrepreneurs Protect Your Wealth!
- Where there’s a Will there’s a way …
- The Tax Gap
- IHT Gifts to Charity
- What’s the Point of Marriage?
- Can An Executor be liable for Inheritance Tax?
- The Dangers of Poor Tax Advice
- Wealth Inequality
- New Record High For Inheritance Tax Payments
- Inheritance Tax Rules Baffle Older Generations
- Inheritance Tax Review Ordered by the Government
- The Passing Of Business Shares On Death
- Inheritance Tax Planning for Cohabiting Couples
- HMRC Challenges Tax Avoidance
- 3 things to consider when thinking of selling your business