Carla Jordan Estate Planning

A trust is a legal arrangement that allows you to set aside assets such as property, money, or personal items to be managed by appointed individuals for the benefit of others. Trusts can be created during your lifetime or included in your Will to take effect upon your death.

Will Trusts are most commonly seen in the following circumstances:

• Protect assets for children or vulnerable beneficiaries
• Manage inheritance for younger family members
• Provide income or housing for a spouse or partner
• Preserve property within the family line
• Help plan for inheritance tax and long-term care

A Trustee is a person or group of people appointed to manage certain assets on behalf of the beneficiaries, who are the individuals set to inherit from a Trust created within a Will.

The primary role of a Trustee is to manage the assets held within the Trust and ensure they are preserved until the time comes to pass them to the beneficiaries. They must act in the best interests of the beneficiaries and follow the specific instructions laid out in the Will or Trust. This includes:

• Managing investments or property within the Trust
• Making decisions about the timing of distributions
• Complying with legal and tax obligations related to the Trust
• Ensuring that the terms and purpose of the Trust are fulfilled

The role of a Trustee is not the same as the role of an Executor.

• An Executor handles the estate after death, applying for probate, settling debts, and distributing assets.
• A Trustee manages any Trusts created in the Will, looking after those assets until the beneficiaries are entitled to receive them, often at a specific age or under certain conditions.

It depends on the structure of your Will:

• If your Will creates a Trust, such as when assets are held for minor children, vulnerable beneficiaries, or for long-term planning, then appointing at least one Trustee is essential.
• If your estate passes directly to adult beneficiaries who have full capacity, and no Trust is created, you may not need to appoint a separate Trustee.

For example, if your children are under 18 and are set to inherit, a Trustee will manage their inheritance until they reach the age of entitlement (usually 18 or older, depending on your Will).

As of June 2024, the Inheritance Tax (IHT) threshold for a single person in England or Wales is £325,000. Any amount above this threshold is taxed at 40%, or 36% if at least 10% of your estate is left to charity.