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GIFT TRUST – Double Trouble resolved!

How can a GIFT TRUST benefit you ?

Consider this scenario

A couple have twins aged 28 years, a boy and a girl.  Their son is planning to buy a house with his girlfriend and the parents would like to give him £30,000 as a deposit.  They like the girlfriend, but are uneasy as if their son’s relationship ends they wish to protect their £30k gift. Hard earned money intended for their son is not lost in a split with a partner where a GIFT TRUST is used.

The parents would also like to give their daughter £30K. The daughter earns a good wage as a journalist and spends more than she has. Paying off her debts on a couple of occasions causes them to be cautious in gifting. Therefore, how can they protect their daughter from overspending?

The answer is a GIFT TRUST

How Does it Work

The parents gift £60k into a GIFT TRUST and remain as trustees. Trustees cannot use the funds for themselves but can guide how it is used by the twins.

£30k is taken from the trust as a loan as a deposit on the house for their son. If he parts company or later marries and divorces the mortgage is paid, the loan repaid to the trust and the remaining equity divided equally. The son keeps his 30K.

The daughter receives money from the trust via a loan note. Situations that arise with creditors will not take into consideration assets from trusts in the form of loans. Protecting their daughter from potential loss.  Retaining  control over when and how much is drawn down from the trust is key to the parents.

Benefits

As a result using a GIFT TRUST moves the money out of the parent’s estate after 7 years and is not part of the Inheritance Tax (IHT) calculation on their death. Additionally, the GIFT TRUST also protects the children from loss due to separation, divorce, bad debt, bankruptcy, care fees and in this case financial naivety.

Passionate about estate planning services becoming easily accessible and understandable to all. Wendy understands “that no two people are the same nor are their estate planning requirements”.

Free consultation any Questions

call Wendy Haden at Enigma Wills & Trusts Ltd on 0191 5800837 or email on info@enigmawt.co.uk

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