Book a free home consultation today

What is a Trust?

In the most basic sense, a Trust is a legal arrangement where an asset is managed by someone else, on your behalf.

Setting up a trust is a key Estate Planning tool, however, the majority of people may never encounter a Trust arrangement in their every day life.

In short, it was a method of wealth protection established many centuries ago in England when wealthy individuals went to war or an exploration of the world, to ensure that their families were taken care of while they were away, or in case they didn’t return. Individuals who the owner respected and considered responsible were given instructions concerning what to do with their owner’s assets to protect their value and what to do with income generated. In effect, the owner put their “trust” in these individuals to honour the instructions.

The same basic principles remain today even though many variations have developed over the centuries and have been refined in the courts and by legislation. This has given rise to a whole profession specialising in understanding and advising on the application of trusts, known as Trust and Estate Practitioners. Members must satisfy the qualification levels and ethical code of conduct of the Society of Trust and Estate Practitioners to be qualified to advise on trust.

Philips Trust Corporation offers professional Executor and Trustee services.

Benefits

Asset protection

Estate planning

Professional Management of Assets

Types of Trusts

Property Protection Trust

A Property Protection Trust, or PPT as it is often shortened to, is a type of Trust that can help protect your share in a property. Setting up a Property Protection Trust allows you to pass your share of the property to your loved ones. Crucially it offers protection from sideways disinheritance and costs raised by third parties against the person living at the property after you had died, such as a surviving spouse’s care home fees.

A PPT is particularly useful to couples with children from previous relationships as it can help safeguard their children’s inheritance.

For example, if you were to pass away before your partner, your share of the property would go into a Trust. The Trust would end upon the surviving partner’s death and your children would then inherit your share of the property. Without a PPT, your share of the property would pass to your partner who could rewrite their Will to only benefit their own children, leaving your children with no inheritance, something often referred to as the sideways disinheritance trap.

Typically when a couple owns a house together and one partner dies, their share passes to the surviving spouse. Whilst at first glance this would appear practical, should the surviving partner accumulate debts, such as if they required residential care, the whole property could then be used as collateral to fund it. However, where the deceased spouse directed their share into a PPT, only the share belonging to the surviving spouse could be used to fund required residential care, effectively guaranteeing at least half of the property will pass to the beneficiaries regardless of potential debts the survivor accumulates.

A Property Protection Trust allows you to take care of everyone’s needs; your partner is able to stay in the property for the rest of their life should they wish to, or could receive the rental income if they chose to live elsewhere, and your beneficiaries are guaranteed your share of the property as their inheritance.

How it works?

The Trust is included in your Will and will be managed by Trustees you appointed in the Will. When the surviving partner passes away, the Trust ceases and the share of the property held in the Trust passes to your beneficiaries as outlined in your Will.

Get in touch with our team today to find out more.

Contact Us

Disabled Person Discretionary Trust

A Disabled Person Discretionary Trust is a type of Trust that can help you to protect interests of vulnerable or disabled beneficiaries. This type of Trust is useful when beneficiary is unable or might have difficulties managing their assets and funds.

Disabled Person Discretionary Trust helps to manage financial affairs of the beneficiary, providing much needed support and level of protection from possible financial abuse. Funds held in the discretionary trust sit outside of the beneficiary estate and therefore are typically disregarded for the purposes of calculating eligibility benefits and social care funding. This can be used to provide funds for additional healthcare support and improving conditions of the beneficiary in case when this is needed.

How it works?

A Disabled Person Discretionary Trust is typically included in a Will to manage the inheritance of a vulnerable beneficiary, and would be managed by Trustees appointed in the Will. Assets and income generated within the Trust is managed by the Trustees appointed in the Will.

For more information, please speak to a member of our team.

Contact Us

Family Asset Protection Trust

Family Asset Protection Trust is a type of Trust that can be set up during your lifetime. You can place key assets into the Family Asset Protection Trust, allowing them to be managed for future generations. This type of Trust can include a variety of assets but is best suited for properties, cash and capital investment bonds.

There is a number of potential benefits of setting up a Family Assets Protection Trust, including:

  • Passing control of the assets to the Trustees; this can allow you to leave matters to Professional Trustees, or your adult children, for peace of mind
  • Ensuring that assets are passed to desired beneficiaries regardless of potential future changes in life such as potential sideways disinheritance or accruing debts
  • Enabling assets to be managed on behalf of a person who could not hold it for themselves, such as minors or disabled beneficiaries
  • Keeping the ownership of the property private
  • Speeding up the administration of the estate upon death potentially avoiding need for Grant of Representation
  • Reducing the cost of administering the estate death as the high value assets are removed from the Estate

How it works?

Setting up a Family Asset Protection Trust is a process of handing over the legal ownership of the asset, such as the title of the property, and putting it into the names of the Trustees. This means that you no longer legally own your assets, but you would retain the ongoing rights and interests in the assets such as continuing to live in the property rent free.

Where the primary asset is the family home, the home could be sold if this is in your best interests (such as if you needed to move to another part of the country), with the proceeds being reinvested in another property for you. Alternatively, the proceeds could be invested to generate an income for you as necessary.

It is important to remember that such Trust cannot be established for the sole reason of deliberately depriving you of the assets, for example to deprive yourself of monies in anticipation of debts or divorce proceedings. If a Trust were established in these circumstances, the deprived debtor will most likely overturn the Trust through the courts.

Setting up a Family Asset Protection Trust can be too burdensome and there can be added tax implications that need to be taken into consideration. You can remove burden from yourself, a friend or family member by appointing a Professional Trustee.

Talk to our professionally qualified team today to find out more.

Contact Us

How can a trust help me?

For the answer to this and many other questions about estate planning, head over to our service pages or contact us

What Our Customers say about us

Fantastic customer service!

Mrs M Jones

Used Philips Trust for Will writing

Sign up for our newsletter

Sign up to get the latest industry news and more…

  • This field is for validation purposes and should be left unchanged.

Copyright 2019 Philips Trust Corporation | All Rights Reserved

Complaints | Privacy Policy | Cookie Policy | Terms & Conditions | Careers