Trusts - worth it?

donny-gal

There is hubby, I and one son. One property, son is overseas and rents.  Will in place to each other then son. (May need to consider 50% to son on first death). Both LPA s in place for us 2.  No risk issues.
Property around £300k.  Sons marriage could be dubious.

Would a trust be beneficial?  Is there anywhere to get more info without these companies coming round trying to sell you theirs?

p00hsticks

What is the rest of your estate worth ?
What is you reasoning for considering a trust ?
If your estate is under the current IHT limits (up to £1 million if you leave everything to spouse and then descendant) , where is the benefit ? 

Keep_pedalling

Your joint net worth would need to be in excess of £1M before IHT would be payable, so setting up a trust would be pointless and a waste of money.

You could create an immediate post death interest trust in your wills leaving a share of the house to your children with a life interest to the surviving spouse. This protects your children’s inheritance if the surviving spouse remarries, protects the spouses security and avoids a CGT liability for your children when eventually sold. It also prevents them from loosing their FTB status if they don’t already own their own home.

donny-gal

£1m not at all likely.  If son divorced in the current scenario would the wife be able to claim on it. 

poseidon1

donny-gal said:

There is hubby, I and one son. One property, son is overseas and rents.  Will in place to each other then son. (May need to consider 50% to son on first death). Both LPA s in place for us 2.  No risk issues.
Property around £300k.  Sons marriage could be dubious.

Would a trust be beneficial?  Is there anywhere to get more info without these companies coming round trying to sell you theirs?

Seems other forum contributors missed your point.

 Your query re trusts related to your son's dubious marriage and from that I infer you have concerns that a large chunk of your family  wealth he eventually inherits, could end up with his spouse in the event of future divorce, especially if has no accumulated wealth of his own ( you mention he rents).

Given the divorce rate now near 42%  of UK marriages this is possibly a legitimate concern.

There could be some merit in  establishing a trust in your wills for your son which removes control of capital from his hands and merely gives him a right to trust income with capital reverting to his own children  ( if he has any ) on his eventual death.  Such a trust could also give trustees power to advance capital to your son at their discretion.

However, such trusts can be costly to administer, you have the problem of who to appoint as ongoing trustees ( professional trustees are an additional layer of costs), and of course your son may well be unhappy that access to his inheritance is restricted in this way.

You could have discussed all this with the solicitor that drafted your original wills. Any reason why you did not do so, or why you would not think to  go back to the same firm to review your wills with these concerns in mind? 

 I certainly do not reccomend you  wander around the Internet seeking information on 'asset protection trusts' which seems to be the kind of arrangement you have in mind. If you have serious concerns to protect your family wealth from your son's potential bad marriage, then go back to a lawyer to discuss the pros and cons, especially since from what you say your estate may be modest ( overall), so running costs of an expensive Will trust might outweigh its perceived benefits.

RAS

And to add, providing your son gets a financial consent order if his marriage ends, anything he inherits thereafter is irrelevant.

donny-gal

 Yes, we would go back to our original solicitor, the will has been in place over 20 years.  The "divorce" possibility has just come to the fore, and we have no experience of finances in Divorce.  There are children now, which means we are considering all options.  Due to working abroad with his family, they sold the U.K. home.

poseidon1

donny-gal said:

 Yes, we would go back to our original solicitor, the will has been in place over 20 years.  The "divorce" possibility has just come to the fore, and we have no experience of finances in Divorce.  There are children now, which means we are considering all options.  Due to working abroad with his family, they sold the U.K. home.

Then it seems my idea of a trust for life for son with 'remainder ' to his children on his death could safeguard your joint estates for your lineal descendants in future. However, it does come at a cost over the years it may be running, so a full and frank discussion is needed with the adviser on this issue and choice of  future trustees.