Independent financial advisers Louis Letourneau and Maggie Fleming, of Isis Financial Planners are fully qualified members of STEP - The Society Of Trust And Estate Practitioners. In the words of STEP, "Full members of STEP are the most experienced and senior practitioners in the field of trusts and estates." Louis' and Maggie's STEP membership ensures that Isis Financial Planners, from its locations in Oxford, the Cotswolds and Brighton, can offer you the very best advice when dealing with your issues of trusts and estate planning.

What is a trust?

Very basically trusts are set up to protect assets and to control how those assets are passed on to future generations in a way that is flexible, reliable and tax efficient. Simple? Some people can be a bit frightened of trusts. It's true that they can be very complex. But the basic structure of trusts is quite simple. All you need is a settlor, some trustees and one or more beneficiaries. The settlor is the person who sets the trust up by gifting cash or property or other assets to the trustees. The trustees are the people who look after the trust property and administer it - they are also the legal owners of the property. The trustees look after the assets of the trust for the benefit of the beneficiaries - the beneficiaries are the beneficial owners of the property.

Why have a trust?

There are many reasons why people choose to set up trusts. It may be in order to make arrangements for their children and grandchildren - the trustees can provide income or capital to those who need it, including grandchildren born after the settlor's death. Or they may set a trust up as part of an estate planning exercise in order to reduce their potential liability to inheritance tax on death. You can make gifts directly to your children but, once you've made the gift, you no longer have any control over it - if your child goes bankrupt or gets divorced, your gift may end up paying off creditors or a former spouse. But if you gift it into a trust of which your child is a beneficiary, you have more control during your lifetime and creditors and ex-spouses cannot get their hands on the capital in the trust. You can also decide at what age your children can receive the income and capital.

There are also specialist uses of trusts. For example, if a person is seriously injured at work, so that they will never work again, it may be sensible to have a large compensation payment made direct to a trust - that way it will not affect their means-tested benefits, as would happen if the money were paid directly to them. Or there are protective trusts, which are designed specifically to protect the trust fund from creditors in the event of a beneficiary becoming bankrupt. Or we may advise a discounted gift trust as a way of removing capital from your estate while at the same time providing an income for life.

Tax advantages of trusts

If you are concerned about the inheritance tax your estate will have to pay on your death, we may recommend a trust as part of an estate planning strategy. It depends on your individual personal and financial circumstances and we will examine these in detail - making sure, first of all, that there are sufficient resources in place to meet your and your partner's future needs before making any recommendations about gifting assets. And trusts are not always the best solution - in some cases, it may be better (as well as simpler) to make outright gifts to family members. There is other 'tidying up' we can do as part of a review - making sure that life assurance policies are under trust and that valid nominations are in place to ensure that death in service benefits pass quickly to your beneficiaries and are not taxed on death.

Advice for beneficiaries - is the trust investment right for you

Or it may be that you are already involved with a trust as a beneficiary or a trustee. As a beneficiary, you may be concerned that the trust assets are invested appropriately for your circumstances and attitude to investment risk and that the investments are suitable, given the current difficult financial climate. All too often trustees entrust the investment of the assets to stockbrokers and this may not be suitable for smaller trusts. Stockbrokers may invest in a portfolio of individual shares and this may be far too risky for a smaller trust. We can advise on collective investments, such as unit trusts, where the risk is spread across a wide range of companies. Investment bonds can also be suitable investments for trusts, as they have tax advantages and can include investment in cash, gilts, index-linked bonds, corporate bonds and commercial property as well as stocks and shares. Furthermore, stockbrokers' charges for discretionary management can be high.

Advice for trustees

If you are a trustee, you should be aware that, under the provisions of the Trustee Act 2000, you have a duty to invest the trust fund so as to provide income for beneficiaries and to protect the value of the capital. In doing so, you must consider the suitability of the type of investment for the type of trust, bearing in mind the ages of the beneficiaries and you must consider whether or not the particular investment chosen is the most suitable of its type. You should also diversify the investments in order to reduce risk, insofar as this is appropriate, given the circumstances of the trust. You must also review the investments from time to time and you must seek advice on investments when setting up the trust or on review. Please read our web page on how we can advise on suitable investments for trusts.

Whether you are a potential settlor, a beneficiary or a trustee, we can provide advice on estate planning and trust investments that is entirely appropriate to your circumstances. Contact Isis Financial Planners.

For all enquiries: tel: 01865 655980, email:
post: 2 Red House Farm, Eynsham Road, Farmoor, Oxford, OX2 9NH, United Kingdom
Isis Financial Planners Limited is authorised and regulated by the Financial Conduct Authority, reference number 207297

Registered at 2 Red House Farm, Eynsham Road, Farmoor, Oxford, OX2 9NH, United Kingdom
Registered in England & Wales No. 4284325

Isis Financial Planners Limited - Chartered Financial Planners - providing financial advice and wealth management advice to Oxford, Oxfordshire, London, The Cotswolds, Brighton & Hove, Sussex from locations in Oxford and Brighton & Hove.

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