Inheritance Trusts
Inheritance Trusts are useful for single people starting to acquire assets ( such as a home) who wish to keep those assets separate from joint assets of a future relationship.
People exiting a relationship wishing to keep their assets separate should also consider Inheritance Trusts as should people expecting to inherit assets and wishing to keep them separate.
If you don’t want:
- A partner making a claim on your current assets in the event of the relationship failing
- Future inheritances being lost to you if your business fails or creditors make claims on your personal assets
- Future estate planning programmes being hampered by a lack of foresight
- Property received on a matrimonial split being placed at risk of loss
then you should consider establishing an Inheritance Trust.
Protection of your assets from relationship claims
If you are a single person just starting to acquire assets such as a first home, you may want to consider the impact of future relationships on ownership of your assets. Remember that if a relationship has existed for 3 years or more, the assets you brought into the relationship may well be treated as joint assets and split equally if the relationship fails. If inheritances are likely to form part of your assets, it would be preferable for the inheritances to be directed to an Inheritance Trust and held under the protection of the Trust. This also applies if a relationship fails and people exiting the relationship wish to ensure their assets remain separate. This structure provides the protection needed to ensure inheritances are not claimed as matrimonial property by former partners.
Protection of future inheritances from claims
Many people will receive inheritances from their parents or other family members and unfortunately, in many cases, those inheritances pass directly into the ownership of the beneficiary. We see, too often, the inheritance becoming intermingled with relationship property and if the relationship fails, split equally with the former partner claiming his/her half share of the assets. Also in a business environment, claims by creditors can result in inheritances from family having to be used to settle these claims.
The formation of an Inheritance Trust to receive inheritances directly from the family member on their decease will protect the inheritance from such claims and will allow the beneficiary to enjoy the inheritance into the future.
Protection of assets from business failure and creditors
Business people’s assets will usually be up for grabs if a business fails, creditors bring claims against the business and personal guarantees are called in. For these reasons, sound planning will ensure that as much protection as possible is given to all assets by the use of Trusts, amongst other planning tools.
Imagine how demoralising it would be to receive an inheritance from parents only to see it lost if your business fails. This can be avoided if the inheritance is distributed directly to an Inheritance Trust and thus protected from creditors.
Assisting future estate planning programmes
Estate planning includes ensuring family assets pass down the chain to future generations and are not lost to business failure, relationship failure and the like.
Unfortunately businesses do fail as do relationships and without sound estate planning, outside parties can and do receive ownership of hard earned family assets that would preferably pass down the generations. Inheritance Trusts are used to ensure the family wealth is passed from generation to generation within the protection of Inheritance Trusts. After all, it is preferable that your children can enjoy the benefits of your family’s wealth rather than their former partners. Beware the gold digger!