PROPERTY LIVING (LIFETIME) TRUST

The main benefits often boil down to Control, Flexibility, and Privacy—things a standard Will cannot provide.

1. Avoiding the Probate Process

This is often cited as the biggest administrative advantage of a Living Trust:

• Speed: Assets held within the trust pass directly to the beneficiaries upon your death, managed by the Trustees you appointed, without needing to wait for a Grant of Probate from the court. This can significantly speed up the distribution of assets.

• Cost Savings: By avoiding or minimizing probate, you can reduce the Executors’ legal fees and court costs associated with administering the estate.

• Privacy: A Will becomes a public document once Grant of Probate is issued. A Living Trust Deed, and the assets held within it, generally remain private and confidential.

2. Planning for Incapacity (The “Living” Aspect)

Unlike a Will (which only takes effect upon death), a Living Trust is active immediately, providing a seamless plan if you lose the capacity to manage your finances:

• Smooth Transition: If you become medically incapacitated (e.g., due to dementia or a severe illness), your appointed Trustees can immediately step in to manage the trust assets (e.g., pay bills, manage investments, or sell property) according to your instructions.

• Avoiding Court: This prevents your assets from falling under the control of the Court of Protection, which can be a slow, expensive, and stressful process for your family. This is an alternative, or complement, to a Lasting Power of Attorney (LPA) for property and financial affairs.

3. Asset Protection for Future Generations

Trusts offer a level of protection for the inheritance once it passes to your beneficiaries that a direct gift in a Will cannot match:

• Remarriage / Sideways Disinheritance: A common use is protecting your share of the family home (usually held as Tenants in Common). If you leave your share in a Life Interest Trust for your surviving spouse, it ensures they can live there for life, but the capital eventually passes to your children—protecting it if the surviving spouse later remarries and writes a new Will favouring the new partner.

• Vulnerable Beneficiaries: You can protect assets for beneficiaries who are too young, disabled, or simply poor at managing money, allowing the Trustees to distribute funds slowly or based on need.

• Divorce / Bankruptcy: Assets held within a trust can, in certain circumstances, be better shielded from future divorce settlements or bankruptcy of your beneficiaries.

4. Long-Term Control Over Assets

A Will generally gives an outright gift. A Trust allows you to dictate the how, when, and why of the gift for up to 125 years:

• Conditional Gifts: You can set specific conditions (e.g., a beneficiary only receives capital when they turn 25, or only for education fees).

• Trustee Discretion: You can empower your Trustees (often trusted family members or professionals) to make flexible decisions based on your beneficiaries’ circumstances years or decades after your death.

When considering a Living Trust, there are tax, legal, and beneficial implications which need to be considered and for which you need specialist advice. Our trust specialists can guide you through the process and tailor your trust to your needs. Finally, your Living Trust will need to be correctly executed and registered with HMRC’s Trust Registration Service, and this is something we can further advise on.