The average Will for a parent will often remain one where a spouse leaves everything to the other with a gift over to children and a provision for substitution of grandchildren.
While some clients have decided that a Trust is not appropriate for their circumstances, many are considering whether it would be wise to form Trusts for their children or encourage their children to set up their own Trusts. This then affords the parents the opportunity to leave a child's share in the survivor's Estate directly to a Trust in which that child is the primary discretionary beneficiary and where sooner or later the particular child will control the Trust through the power of appointment.
The advantages include:
Ring fencing assets for a particular child and his/her family
Better protection against creditors of the child as Trusts created by parents for a child are far more protected than Trusts created by a child
Avoiding the necessity of a child, who wants to transfer inherited assets to a Trust having to sell those assets to a trust at market value and then under current legislation embark upon a gifting programme to eliminate the debt. A simple bequest to a Trust for a child will avoid that consequence
Giving the surviving spouse the opportunity of retaining some sort of control over the asset for the child (if felt necessary) in that the asset can be transferred to a Trust controlled by persons other than the child until a date deemed appropriate for the child to take control
There may also be possible residential care benefits in the future as no assets will come into the child's hands.
For further information or assistance in setting up an Inheritance Trust, please contact Tony Fortune, Katherine McCarthy or Cleo Shortland.