Trusts

Accumulation/Discretionary Trusts

This type of trust offers more flexibility and protection of the assets listed, if any circumstances change after the trust has been made. It is generally put in place when the Trustee requires a valuable way to protect their assets from beneficiaries who do not have the ability to manage their own funds, such as: Children, people who have an illness, people who have a disability, people who might make poor life choices, people who lack mental capacity, etc. Unlike other trusts the trustees can make changes to what the beneficiaries will receive from the trust.

Bare Trusts

The assets listed in a Bare Trust will go directly to the intended beneficiary, they are often used to pass assets onto young people and the trustees will be in control until the beneficiary is old enough. Once a beneficiary has been decided it cannot be changed once the trust has been put into place. When the beneficiary received the assets, they will not have any inheritance tax implications.

Interest in Possession Trusts

An IIP Trust is commonly set up to authorise the beneficiary to any income as soon as it is made. The benefits of a IIP Trust include: a stable income for the surviving partner if spouses have made a joint IIP Trust, provides protection of your property’s value against financial assessments, any remaining assets will be passed onto any other named beneficiaries, you have complete control over who receives assets from your estate.

Irrevocable Trusts

This type of trust cannot be changed, modified, or terminated without the beneficiary’s permission. The main purpose of opening this trust is to transfer assets from the grantor’s control to the beneficiary and the grantor gives up all of their rights to the assets.

Mixed Trusts

A mixed trust is a combination of more than one type of trust and will incorporate several elements of various different types of trusts. Some people may opt for this trust if they have children of different ages.