The Main Types of Trust Funds
• Bare Trust – Also known as a simple trust, is where the beneficiary has a right to both income and capital if over the age of 18.
• Interest in Possession Trusts – This is where the trustee must pass on all trust income to the beneficiary as it arises.
• Discretionary Trust – This is where the trustee can make certain decisions, based on their discretion, about how to use the income and occasionally capital in the trust. A discretionary trust can also be used to put assets aside for future needs.
• Accumulation and Maintenance trusts (or A&M trusts) – Are types of discretionary trusts, where the trustees can accumulate income and add to the capital within the trust for the benefit of children (under the age of 18).
• Bereaved Minors Trust – Is a trust for a minor (under the age of 18) who has lost at least one parent or step parent. This type of trust can be exempt in some circumstances from Inheritance Tax charges and can be increased to 18-25 year olds. Please contact us for more information.
• A Living Trust – Is ideal for those who have complex financial or personal situations. They can be updated (if revocable) as circumstances change or arise. Find more information here on living trusts on our living trusts page.
• A Pilot Trust – Also known as a feeder trust, a pilot trust allows an individual to receive funds or the estate from a legacy in their Will once they die. You can find more information on pilot trusts on our pilot trust page here.
• Trusts for Vulnerable People – Also known as ‘trusts for vulnerable beneficiaries’ or ‘disabled trusts’. To qualify for this kind of trust, the beneficiary must be under the age of 18 and has a deceased parent or is disabled. For more information on this, please contact us.
Estate Planning with Abacus Wills & Trusts
Estate planning is the process of arranging, during an individual’s life, for their estate – who receives what, which things are being left to which person and when you want them to receive it. Not just for property, estate planning includes all chattels and belongings to an individual, and is therefore applicable to everyone (no matter how small or large their estate may be). An estate plan can, and often does, form the majority of any one type of trust.
In the event that you should die or become incapacitated without having made an estate plan, the estate will be divided by the laws of probate, and may not be left accordingly to who you may have intended it to do so. For example, if you have children under the age of 18, the court may appoint guardians who will then be in control of their inheritance, neither of which you may have wanted during your lifetime. Therefore it’s really important to ensure that your affairs, and estate is in order.
Estate planning also helps reduce taxes on the person’s estate and the administration during the process of probate by including estate plans in any trusts or Wills.
We provide bespoke estate planning services, conducting in-depth assessments of your assets alongside your long-term objectives and any concerns you may have to create a wholly bespoke estate plan, which we can integrate into a an existing, or new, Will or Trust fund.