What is an Asset Trust?

What is an Asset Trust

A common question we receive from our clients is "What is an Asset Trust?" In this article, we discuss:

  • What is an Asset Trust?
  • What are the benefits of an Asset Trust?
  • How to get an Asset Trust

What is an Asset Trust? 

Trusts have been around for centuries and have developed through the law of equity and in modern times are often used by hospitals, banks, charities and the Government. An Asset Trust is an arrangement where either property or assets or both are given over to one or more persons who will be nominated as Trustees who will administer the Trust.

Once an Asset Trust has been created, you can use it to 'ring-fence' your assets. Most people will protect their home and their savings, leaving capital in their bank or other savings accounts for ongoing living expenses. Income from savings protected within the Trust can be paid directly into your bank account to supplement income from earning or pensions.

Just like a safety deposit box, an Asset Trust can be added and removed from the trust during your lifetime. If you have large expenses that cannot be met out of normal income, like a new car, holiday, or house repairs, the appropriate sum can be transferred to your bank account from the Trust.

What an Asset Trust does to benefit you

  • Pass wealth efficiency and privately to your heirs.
  • Pressure assets for heirs and favourite charities.
  • Reduce estate taxes for married couples.
  • Gain control over distribution of your assets.
  • Ensure that your retirement assets are distributed as you've planned.
  • Keep your assets in your family.

Asset Trusts and losing mental capacity

If you lose mental capacity, the law states that you are no longer allowed to manage your own affairs. Assets held within the Trust will then be managed by your Trustees on your behalf. Your Trustees can effectively 'stand in your shoes' to make decisions on your behalf but these must be for your benefit. They are able to add or remove assets or use the income from the Trust to help you and improve the quality of your life. Assets held outside the Trust will fall under the control of the courts. Creating a Lasting Power of Attorney will enable the people you choose to manage the assets that you own outside of the trust.

Asset Trusts and going into care

If you go into care, and you do not have a spouse or dependant relative living in your home, you will need to decide whether to sell it or to rent it. If you have gone into care and have lost mental capacity, your trustees will need to make this decision for you. If the property is sold, the proceeds will continue to be protected within the Trust and be invested and you will normally receive the interest or income earned on the invested capital.

Asset Trusts after your death

After your death, the trust continues to work to protect your assets for your beneficiaries. The Trust can continue to hold assets safely within it, or pay them out to the specified beneficiaries. The Trust is extremely flexible after your death and has the potential to continue protecting your family for 125 years from the date it was created. That means that all of the benefits described in this document can not only protect you and your children but can also protect your grandchildren and great grandchildren.

So now you know what an Asset Trust is and what the benefits of an Asset Trust are, why not get our free Asset Trust information pack today?

Our trained consultants can discuss your current circumstances and recommend the products that will provide the correct protection for you, your family and your assets. For peace of mind contact the Will Associate' today and Get your free information pack or call us on 01630 436004 to arrange a free appointment with one of our trained consultants, at a time convenient to you and your family in the comfort of your own home.

Get your free information pack today or call us on 01630 436004.