The UK probate system is complex, some of our visitors say far too complex. It can take months to locate a will, validate it, and get letters of probate or administration from the UK government.
During this period, and sometimes afterwards the deceased’s bank accounts are frozen. This means the late person’s dependents cannot access the income they may previously have relied upon.
A Family Trust Can Ensure Immediate Support
Furthermore, the late person ‘on the other side’ may be kicking their spiritual shins for not setting up a family trust. This is a legal instrument whereby a nominated person obtains control over specified assets the moment their owner dies.
They are thereby legally entitled to administer them to the benefit of the nominated beneficiaries. This could include cashing them in, or directing income from them to the late person’s dependents, if the instrument nominated them as beneficiaries.
A Family Trust Operates Outside the Probate Process
Closing out a will can be a lengthy, sometimes expensive process, especially if somebody challenges the authenticity of it. Distant relatives, previous spouses and deliberately dis-inherited people can pop out the woodwork in surprising numbers.
Whether or not they are entitled to a slice of the cake can take months even years to resolve. Creating a family trust while we are alive can ring fence nominated assets, and ensure stated beneficiaries get at least part of their entitlement while a legal battle rolls on.
A Family Trust Relieves a Family Head from Future Worry
A family trust prevents a worry returning in the dead of night. If all major assets are included in the family trust, there may be no need for probate in Windsor or elsewhere at all. Avoiding legal costs should mean more money in the pockets of cherished dependents.
Moreover, if trust beneficiaries become unable to defend their interests, there is far less likelihood of them falling victim to changing circumstances. An example of this would be the surviving spouse remarrying, and making their new partner their sole heir.
A Family Trust Can Help With Means Tests
A growing number of older people have assets, but no income. This situation acts against them in terms of their entitlement to means-tested benefits. Moving the assets into a family trust could help the senior person avoid almost unaffordable contributions to residential care fees.
Do they sell their assets to afford the care; or ring fence them in a trust for their children that could achieve the ‘best of both worlds’ for them?
Why It’s Important to Obtain Specialist Advice
We provided a summary of the benefits of family trusts here. We did not mention the potential disadvantages because this is outside this narrow topic. Remember this; a family trust is locked in after the grantor dies.
Therefore, it’s essential to obtain specialist advice before creating this legal instrument. That’s because you can no more change a family trust after death, than you can write a new will.