Earlier this year there was a major shake-up and simplification of the laws surrounding trusts – something that we at KC Trust paid particular attention to – which actually resulted in a number of individuals becoming confused by the changes and what it means to them. In an article for The Telegraph, personal finance expert Jessica Winch helpfully decodes what these changes mean and how they affect residents of the UK when it comes to their property and trusts.
The purpose of a trust is to help family units and individuals protect their assets, which are known as ‘trust property’, according to the HMRC website. In the case of property, a life interest trust can provide an individual the security of being able to live in their own home for the rest of their life if their partner has passed away. The property is also protected from being used as capital in order to pay for long-term care, if it is required – this means the property is guaranteed to be passed on to the beneficiary.
In order for this to happen, a couple must register the house as owned by “tenants in common” – by doing this, the future of the property will depend on the will of the deceased, meaning that the trustees (usually at least two individuals, one of whom is traditionally the surviving partner) will have control of the estate. This means the survivor’s right of occupation is well guarded.
There were a number of changes made to both capital and income trusts recently, with the Government receiving Royal Assent for the Trusts (Capital and Income) Act in January 2013. The final reform of the act came into effect in January of this year, however these changes have not particularly affected the rules surrounding will-planning of this type, Gary Heynes of Baker Tilly is quoted as saying.
At KC Trust we always recommend our clients seek professional and detailed legal advice regarding wills and trusts.