Family Trust

billyolly

Can any body tell me more about Family Trust and how much is your estate worth before it is worth setting one up.I have a wife 2 children and 3 grand children.Any advice would be welcome ,we have a mirror will already.

Katiehound

Is this to avoid inheritance tax? Just given an article away today!- If I remember correctly think IHT threshold is £325,000 per person, anything above that taxed.

Savvy_Sue

Katiehound wrote: »

Is this to avoid inheritance tax? Just given an article away today!- If I remember correctly think IHT threshold is £325,000 per person, anything above that taxed.

Except that anything left to the spouse is IHT free, and increased the IHT allowance on the second death.

Whatever the OP's intentions in setting up a trust, it needs specialist (paid for) advice to ensure it's going to achieve its aims.

zygurat789

billyolly wrote: »

Can any body tell me more about Family Trust and how much is your estate worth before it is worth setting one up.I have a wife 2 children and 3 grand children.Any advice would be welcome ,we have a mirror will already.

You seem to have reached an answer to a question you haven't shared with us and you don't seem to know any of the reasons for this decision.
Start again with "What's the problem?".

billyolly

The problem is i know nothing about family trust only what i have heard
I was only asking peoples advice .We have a simple mirror will made up over 6 years ago and know next to nothing about such matters

Mojisola

billyolly wrote: »

Can any body tell me more about Family Trust and how much is your estate worth before it is worth setting one up.I have a wife 2 children and 3 grand children.Any advice would be welcome ,we have a mirror will already.

Savvy_Sue wrote: »

Except that anything left to the spouse is IHT free, and increased the IHT allowance on the second death.

As Sue says, if you are married then the current threshold is £650,000 after the second death (providing none of the allowance is used by the first to die).

Do you have more than that - if not, don't worry about inheritance tax.

If your estate is only a bit over the threshold, you can donate to charity in your will, give money away while you're alive (and live for another seven years) or even spend some it on yourself.

If it's a lot over the threshold, pay for financial advice from an independent advisor, not from someone who wants to make money out of you by setting up a trust you probably don't need.

Knit_Minion

I would look very carefully at the costs of setting up a family trust, especially if you are near the threshold.

My parents went to one of those financial planning events held in a fancy hotel and on their advice set up mirror wills (no problem there) with the first deceased's assets going into a family trust. The details of what the trust could be used for is detailed in the wills. I am not sure what the initial cost of setting this up was but imagine it wasn't cheap.

When my mum passed away I didn't feel confident to handle what would have been a fairly simple process if it hadn't been for the trust. The cost of the solicitor was in the thousands. It is very doubtful we would have been liable for inheritance tax when my parents joint assets were taken into account.

When my dad passes away I am in no doubt we will have to take legal advice again to settle the estate. Any saving we may have made has been eaten up by the legal/financial profession. That is before the moral argument that tax could be used for the benefit of the many.

pollypenny

There are other reasons for a trust.

If one partner dies, the survivor cannot just inherit, marry again and leave everything to a new spouse, cutting out children of the first marriage.

Savvy_Sue

Knit_Minion wrote: »

I would look very carefully at the costs of setting up a family trust, especially if you are near the threshold.

My parents went to one of those financial planning events held in a fancy hotel and on their advice set up mirror wills (no problem there) with the first deceased's assets going into a family trust. The details of what the trust could be used for is detailed in the wills. I am not sure what the initial cost of setting this up was but imagine it wasn't cheap.

When my mum passed away I didn't feel confident to handle what would have been a fairly simple process if it hadn't been for the trust. The cost of the solicitor was in the thousands. It is very doubtful we would have been liable for inheritance tax when my parents joint assets were taken into account.

When my dad passes away I am in no doubt we will have to take legal advice again to settle the estate. Any saving we may have made has been eaten up by the legal/financial profession. That is before the moral argument that tax could be used for the benefit of the many.

Is it possible for your dad to break the trust / amend his will?

margaretclare

billyolly wrote: »

The problem is i know nothing about family trust only what i have heard
I was only asking peoples advice .We have a simple mirror will made up over 6 years ago and know next to nothing about such matters

I know nothing about it either. You can't expect advice on a forum such as this - advice is what you go to a professional for and what you pay for. What you get here is the life experience of lay people.

Now. You say 'what you've read'. What is that i.e. what have you read and where did you read it? And what's the reason you want to know? You make the point that you have mirror wills. So? Is your question linked to the will/s?

malc_b

A couple a years back the IHT changed so that you no longer needed a trust in order for a couple to pass on 650k rather than 325k. If the husband leaves everything to the wife (and vice versa) then the survivor has 650k of allowance. That's the simplest way of doing things if you look at the gov forms IHT217, IHT205. If the first die leaves bequests it becomes a bit more complex so it's easy to let the survivor just give stuff away (assuming you trust them).

However, as has been said trusts are still useful since, as I've been told, they protect the 1st to die's share being taken by say care fees for the survivor.

There are companies that will sort out probate for you for a fixed fee, after assessing how complex the case is. Shopping around is good idea.