Asset Preservation Trusts

In_for_a_penny

Could someone please explain Asset Preservation Trusts and how they operate – in laymen’s terms?


Is there a charge for the setup and management?


I am a married man with a wife and son and am fully employed (30+ years). I am a member of my Company’s pension scheme and have a Death in Service benefit.



A work colleague mentioned recently about these types of trusts – although I don’t think he actually has one himself.


Thanks.

dunstonh

This is where the death benefit of your personal pension is paid to a trust instead of a beneficiary. The beneficiary is then paid from the trust (subject to the trustees discretion).

it is a niche arrangement and not required for the vast majority of people. Especially after the recent pension changes. Personal pensions are now inheritable (but not part of the estate). So, can be passed on forever potentially without the need for a trust. Although a trust can formalise it and prevent a beneficiary from blowing it all.

In_for_a_penny

I presume that a Trustee can also be a Beneficiary? Also does an Asset Preservation Trust only apply to Pension Schemes with a death benefit associated with it?

TH1878

In_for_a_penny wrote: »

I presume that a Trustee can also be a Beneficiary? Also does an Asset Preservation Trust only apply to Pension Schemes with a death benefit associated with it?

Yes, a trustee can also be a beneficiary.

However, the use of these types of trust are largely redundant with the new pension legislation. Just make sure that you have a correctly completed death benefit nomination form in place.

If you have adult children, make sure they are named on the nomination form (even if 1%) so that the pension scheme trustees have the ability to pay benefits via flexi-access drawdown, rather than a lump sum.