At ProtectNI, trusts are a cornerstone of our services, providing a solid foundation for preserving your legacy, protecting your wealth, and achieving tax efficiency. We offer a wide range of trust solutions tailored to meet your unique needs, whether you’re focused on legacy preservation, seamless wealth transfer, or minimizing tax liabilities. Each trust we establish is customized to align with your specific goals, ensuring your family’s future is secure and your financial aspirations are fully realized.
All you need to know about:
Family Trusts
What is a trust?
At its core, a Trust is a straightforward contract where one individual transfers control of an asset or property to a trustee for the future benefit of another individual or group of beneficiaries. While Asset Managers and Trustees both oversee assets, Trustees provide a more bespoke service, adhering closely to the specific terms set by the trust creator.
Why Choose A Trust?
Regulated and Reliable: Statutory trusts operate within a clearly defined legal framework, offering a high degree of transparency and reliability. They are subject to government oversight, which ensures compliance with legal requirements and protection of beneficiaries’ interests.
Specific Purpose Trusts: These trusts are often utilized for particular objectives, such as real estate investment, asset securitization, and collective investment schemes. The statutory provisions guide their formation and operation, making them ideal for structured, goal-oriented financial planning.
Benefits Of A Trust Structure
Asset Protection: Trusts help shield your assets from creditors, lawsuits, and divorce settlements by transferring ownership to a trustee.
Tax Efficiency: Trusts can minimize inheritance tax and, in some cases, income and capital gains taxes.
Estate Planning: Trusts allow you to control how your assets are distributed after your lifetime, which is particularly useful for managing wealth for younger beneficiaries
Privacy: Trusts generally remain private, unlike wills, which become public documents once probated.
Understanding Discretionary Trusts
Trustee Discretion: The trustee has the flexibility to decide which beneficiaries receive payments, when, and how much. This allows the trust to adapt to changing circumstances.
Beneficiary Class: Instead of naming specific beneficiaries, a discretionary trust can define a group or class of potential beneficiaries (e.g., family members).
Letter of Wishes: The settlor (person who creates the trust) may provide non-binding guidance to the trustee on how to manage and distribute the assets.
Tax Implications: Discretionary trusts are typically taxed at a higher rate (e.g., 45% on undistributed income in the UK) and may face periodic inheritance tax charges. Careful planning can help mitigate these tax burdens.
Understanding Non-Discretionary Trusts
Fixed Entitlements & Specified Beneficiaries: Beneficiaries have specific, predetermined rights to the trust’s income and/or capital. The settlor clearly names the beneficiaries and their entitlements. The trustee has no discretion and must follow the trust’s terms.
Predictability: These trusts offer certainty, as beneficiaries know exactly what they will receive, making financial planning easier.
Tax Implications: Income from a non-discretionary trust is typically taxed at the beneficiary’s personal tax rate, which may be lower than the trust’s rate in a discretionary trust.
A Trust Is an Investment That Ensure Generational Wealth Occurs:
A trust is more than just a financial tool; it’s an investment in your family’s future that ensures generational wealth is preserved and passed down effectively. By establishing a trust, you create a secure, structured plan for managing and distributing your assets, protecting your wealth from external threats like creditors or legal claims, and minimizing tax liabilities. This careful planning not only safeguards your financial legacy but also provides peace of mind, knowing that your hard-earned assets will continue to benefit your children, grandchildren, and beyond. Trusts are essential for anyone serious about building and maintaining generational wealth.