Trusts have been a cornerstone of estate planning for centuries, offering a means to manage and protect assets. In the context of Inheritance Tax (IHT) planning, trusts play a crucial role:
- Flexibility: Trusts allow you to specify how and when assets are distributed. This means you can ensure your loved ones are cared for in the manner you wish.
- Mitigate IHT Liability: By placing assets into a trust, they might no longer be part of your estate for IHT purposes, potentially reducing the IHT due upon death.
- Protect Assets: Trusts can shield assets from potential creditors, ensuring they are preserved for your beneficiaries.
- Control: Even after transferring assets into a trust, you can retain a certain level of control, depending on the trust type.
- Various Trust Types: From Bare Trusts to Discretionary Trusts, the UK offers various trust structures, each with its unique benefits and considerations for IHT planning.
In Conclusion: Trusts offer a versatile and effective means of managing assets, both during your lifetime and after. When utilised correctly, they can be a vital tool in reducing Inheritance Tax and ensuring your assets are distributed according to your wishes.
