why recommend sibling trusts?
Why use Trusts?
We all know that setting up a Trust can be the most flexible and protective method of gifting and bequeathing assets without passing them absolutely to Beneficiaries. When assets are passed to beneficiaries “absolutely” they are at risk from divorce or separation, bankruptcy and creditors, re-marriage, care costs and taxation.
Simply setting up a Trust (or Trusts) for your clients can help protect their hard-earned money and assets from any such attacks being made against their chosen beneficiaries, no matter what their future holds.
How many Trusts does your client need?
There is no limit as to how many Trusts a client can create. Ideally, you want to create as many Trusts as is required for each significant asset, purpose or beneficiary.
Why recommend Sibling Trusts?
There are many reasons you and your clients should consider using Sibling Trusts, many of these were covered in the previous webinar No.60 (available to our members).
By establishing separate Trusts for each child, beneficiary, or assets, can allow the Settlor to take their individual needs into account. Choosing the amount they wish them to benefit from and how they want them to benefit. Each Trust can have its own set of Trustees and beneficiaries meaning that siblings do not have to ask each other for permission to access their own share of the assets.
Appointing different beneficiaries and different Trustees to individual Trusts, results in better autonomy and management. By simplifying the management of the Trust it can also reduce costs. A group of Trusts can be simpler to manage than a single Trust with many purposes, mixed assets, multiple Beneficiaries and more potential for conflict amongst them.
Sibling Trusts can also be extremely beneficial for the protection of assets in the case of divorce, and can further reduce the risk of funds being included in any financial settlement.
Written by Countrywide Tax & Trust Corporation Ltd
The Private Client Professor
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