Trusts are a valuable part of financial planning. They allow you to control how and when your money is passed on, helping you look after your loved ones in a way that reflects your wishes. Whether you want to provide for children, safeguard assets or reduce inheritance tax, trusts can offer clarity and confidence.
What Is a Trust?
A trust is a legal arrangement where you give money or assets to trustees to hold and manage for the benefit of someone else. The person setting up the trust is known as the settlor. The trustees look after the assets, and the people who benefit are called the beneficiaries.
Trusts have been used for centuries to manage wealth across generations. They are flexible and can be tailored to suit your individual circumstances. For example, you might use a trust to provide for young children until they reach a certain age, or to protect a family home from being sold in the future.
The Benefits of Using a Trust
One of the key reasons people use trusts is to maintain control. Rather than giving someone a lump sum outright, a trust lets you specify how the money should be used and when it should be paid out. This can be especially helpful when providing for children, vulnerable relatives or beneficiaries who are not yet financially responsible.
Trusts can also help to reduce the value of your estate for inheritance tax purposes. Assets placed into certain types of trusts may no longer be counted as part of your estate after a set number of years, depending on the type of trust and how it is structured.
Another benefit is privacy. Unlike wills, which become public after death, trusts generally remain private. This can offer reassurance if you prefer to keep financial arrangements confidential.
How a Financial Adviser Can Help
Trusts can be complex, and the right type of trust depends on your goals, the people you want to support and your overall financial situation. A financial adviser can help you decide whether a trust is suitable, explain the options available, and work alongside legal professionals to put everything in place.
There are different kinds of trusts to consider. Discretionary trusts give trustees the power to decide how money is paid out, offering flexibility. Bare trusts give beneficiaries full access once they reach a certain age. Interest in possession trusts allow a beneficiary to receive income straight away while the capital is preserved for someone else.
An adviser can guide you through each option, explain the potential tax implications, and make sure the trust works as part of your wider estate and financial plan.
Trusts as Part of Your Legacy
Putting a trust in place is about more than tax planning. It is a way to make sure your money continues to support the people and causes that matter most to you. Whether you want to fund education, support a family member with additional needs, or protect wealth for future generations, trusts give you the tools to do so with structure and care.
At Financial Framework, we take time to understand your goals and help you find the right solution. With the right planning, a trust can bring peace of mind and lasting impact.
We’re here to support you every step of the way. Contact us to find out more.
