Lifetime trusts are set up during a settlor’s life, and assets or money settled into them immediately. This money or assets can be loaned out to beneficiaries by the trustees at any time, or can remain within the trust and be invested.
Family Gift Trusts are a much under-used vehicle. Also useful for Inheritance Tax (IHT) planning, they allow you to make gifts into the protected trust environment for your family or loved ones whilst you are still alive. The reason these are IHT effective is that every 7 years, you can put up to £325,000 into them (although many people choose to utilise this even for much smaller gifts) which will start a 7 year clock, and once passed this will be considered to be outside of your estate for tax purposes.
The main risk with this product is that one the funds are in the trust, the settlor cannot access the funds for themselves. The reasoning behind this is that if you were still able to benefit from the funds, they would not be able to be classified as outside of your estate.
To find out more information on types of Gifting and the benefits of using this technique, please click here to be taken to Inheritace Tax Planning.
Care Home Planning is a very interesting area and something we work on with many clients, regardless of their age. With care costs in South East England at such high rates, we can consider bespoke plans with our clients to ensure they are covered if they ever need to go into care. We also help individuals with their care fees assessments.
If you are concerned about Care Home Planning, then now is the time to get your full financial planning into place. If you are deemed mentally incapable by a medical professional, you will no longer be able to make a will or trusts, give substantial gifts or create Lasting Powers of Attorney as there is no proof that you have the competency at the time to make those decisions.