When children or grandchildren are born, it is inevitable that you will want and need to start planning for their future. In particular, you may wish to guarantee their financial security even after you are gone. Which is why you may consider setting up a Trust fund.
At Gorvins, we know that creating child Trust funds is not always an easy process. That is why we offer advice and guidance to help you secure financial stability for your children or grandchildren’s future.
When setting up a trust fund it is important to consider the needs and circumstances of the beneficiary. If you wish to give them larger sums of money, then a setting up a Trust may be best in order to protect this money for them in the future and reduce the impact of inheritance tax on the sum.
There is a choice between a Discretionary Trust, one that gives Trustees complete discretion as to when the beneficiary receives an income or capital sum. However, this means that the beneficiary may not receive an equal amount of capital and they will have no right to an income without the decision of Trustees.
On the other hand, you can also set up a Trust fund which allows an income or capital sum only when the beneficiary reaches a certain age (typically 18, 21 or 25). Such Trusts also allows Trustees to adjust the amount that individual beneficiaries receive or even add a new beneficiary if required. A Trustee also has the power to use funds from the Trust to contribute towards a child’s maintenance, education and to their benefit (before they reach a majority age).
For smaller amounts of money, a bare Trust for child may also be appropriate. This is where the beneficiary has a right to the assets or money in a Trust, but it is simply held on his behalf by others. This differs from setting up a Trust fund of a different kind, as the child can demand that the whole Trust is transferred over to them once they reach the age of 18.
On the whole, child Trust funds can be useful both in the long and short-term. As, primarily, it means that their assets and funds are tied up and protected until they reach adulthood. There are also a number of other benefits when it comes to setting up a Trust for a child. Including:
By no means is this an exhaustive guide to child Trust funds, there may be a solution that is much more apt to your situation not outline here.
If you have questions or need advice in regards to setting up a Trust fund for a child, then Gorvins can help. Contact us on 0161 930 5151, e-mail firstname.lastname@example.org, or complete our online form in order to receive a call back from a member of the team.
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