A Trust is a simple way to protect your assets and ensure they are managed for the benefit of your loved ones. It is a legal arrangement where certain people are responsible for looking after things like money, property or investments on behalf of others.

Here is how it works:

• The Settlor – the person who places assets into the Trust

• The Trustee(s) – the person or people responsible for managing those assets

• The Beneficiary/Beneficiaries – the person or people who will benefit from the Trust

Once you place assets into a Trust, they no longer belong to you, although you may still benefit from them. This can be a useful way to protect your estate and, in some cases, reduce the amount of inheritance tax due when you pass away.

Trusts can offer real peace of mind, making sure your wealth is passed on in the right way, at the right time.

Protecting your inheritance from common risks. Did you know that when assets are passed directly to beneficiaries as a lump sum, they can sometimes be lost due to life’s unexpected events? Here are five of the most common risks that could impact your estate and your loved ones:

1. Long-term care costs

   With people living longer than ever, the cost of care is a growing concern. If you own your home and live alone, your assets could be assessed to cover care costs, potentially forcing the sale of your family home. Currently, if you have more than £23,250 in assets and do not live with an eligible party*, you may have to pay for all your care. This can quickly deplete savings meant for your loved ones.

2. Divorce of a beneficiary

   If you leave money to a child and they later divorce, part of their inheritance could end up with their ex-spouse. For example, if your son receives £50,000 from your estate and invests it in a shared home with their partner, they could lose half of it in a divorce settlement.

3. Marriage after death

   If your partner remarries after inheriting your estate, everything you left to them could become jointly owned with their new spouse. If that marriage ends in divorce or your partner passes away first, your hard-earned assets could end up with someone else’s family instead of your children.

4. Bankruptcy or creditors

   If a beneficiary experiences financial difficulties, their inheritance could be at risk. Whether they run into debt or face business struggles, creditors may be able to claim their inheritance to cover outstanding liabilities, meaning the money you left for them could be lost.

5. Inheritance tax

   While assets can pass tax-free between married couples and civil partners, anything over £325,000 may be subject to a 40% inheritance tax. This can continue for generations, as assets inherited by your children may be taxed again when they pass them on.

How to protect your assets

If you have not written a Will or only have a simple Will, your estate could be vulnerable to these risks. The good news is that Trusts can help safeguard your assets, ensuring your loved ones receive their full inheritance in the way you intend. Let’s get it sorted, so your estate is protected for the future.

This is a smart way to safeguard your share of your home, ensuring it passes to your chosen beneficiaries while still allowing your partner or loved one to live there for life. This type of trust can help protect your home from being used to cover future care costs and ensures that your share isn’t lost due to remarriage or family disputes. It’s a simple yet effective way to give you peace of mind, knowing that your home and assets are secured for the people you care about most.

This kind of trust is a flexible way to protect your assets while giving your chosen trustees control over how and when your beneficiaries receive their inheritance. This is particularly useful if you have vulnerable beneficiaries, such as children, those with disabilities, or family members who may not be financially responsible. A Discretionary Trust helps safeguard your wealth from potential risks like divorce, bankruptcy, or care costs while ensuring that your loved ones are supported in the best way possible. It gives you peace of mind, knowing your estate is managed according to your wishes, even after you’re gone.