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Looking to
Bare the trusts arefuture
true to their name
Bare Your Trusts Wealth,
and just deal with “bare”
essentials! Your The trustees hold Decision
the
trust Kathryn property on behalf Smith of the Cowap, a
beneficiary, Victoria itIremonger, really is that simple. a paralegal at
The Partner beneficiary owns in the
Private Client
beneficial interest in the property
and
team
they areat entitled
Wansbroughs
to the income
highlights
it generates (if any) but they will
not
testamentary
own the propertyfreedom...
outright until
the importance of a Will for
they reach the age of 18 years of
Testamentary freedom is the concept that you can, within your
age.
Will, parents leave your wealth or parents-to-be...
to whomever you wish - whether by
Wansbroughs Solicitors in Devizes considers
the English Court’s commitment to upholding
outright
Bare trusts
provision
are often
or
used
by placing
by
assets into a trust.
grandparents to gift money to their
grandchildren Did you know who that 60% are below of the the adult agepopulation of 18 years in old the and UK does therefore not
have The recent a Will? case of Cowan v Foreman reaffirmed the English
unable to receive such funds outright. In many instances,
grandparents
Court’s commitment
may open
to
interest-bearing
upholding testamentary
bank accounts
freedom
in their
For grandchild/grandchildren’s
wherever those adults possible, without by rejecting a Will, names who Mrs
and also Cowan’s
then happen transfer
application to be money parents to
into(or
that
parents-to-be) account receive her – either inheritance to larger children one-off, in under the form less the frequent age of outright of 18, sums the legacies implications or more instead frequent of of
not through sums, having i.e. the monthly a trusts Will should sums. set up not The by be Mr grandparents ignored. Cowan’s Will. can rest assured in this
instance that they retain control of the funds as signatories of the
account Who
Under
will
the while administer
terms their of grandchildren Mr
my
Cowan’s
estate?
Will, are minors. he made TheMrs funds Cowan can be a
If used beneficiary
you for die things without
of two their a
trusts.
Will, grandchild leaving
Since may only
Mr Cowan’s
children require, i.e. under
death, school 18,
the
those fees, trustees or
children school have been trips. will,
supporting
legally The only speaking, stipulation his widow
be is too
with that young
large theyto must monthly
deal benefit with
payments.
the the It
administration
grandchild is however because reported
of your
although that
estate.
Mrs grandparents
Instead,
Cowan was
a third
uncomfortable will
party
remain
will
in
need
control with
to
the of
take
arrangements, the funds,
up the
they
role
actually feeling
of administrator.
that belong she towas If
the
no
“at
other
grandchild. the
family
mercy
members
of the trustees”
exist,
then
who Whenthe could thedecision grandchild cut her
as
adrift
to attains who
with
will the no
act age access
can of 18, be
to
a they money
complicated can at request all’.
one. that By the
trustees
appointing
transfer
an executor
control
under
of the
the
trust
terms
property
of your
and
Will,
the
this
income.
uncertainty
Bare
trustees
can
Mrs
be
Cowan
removed
must therefore bear
and
in
unnecessary
mind applied thatto if they delays
High consider
avoided.
Court 18to years vary old the to be
too distribution young for of their her late grandchildren husband’s toestate. inherit Ruling large sums against of money her, the
then
When
judge astated bare trust
will my
that may
children
‘there not
inherit
is be absolutely suitable.
my estate?
nothing in the evidence to
Children
It suggest is not just
who
that for the
inherit
grandchildren trustees
under
would
an intestacy
thatblatantly bare
will
trusts defy
do
can
so
the
at
be
the
deceased’s created.
age of
Bare
18.
Many
wishes’ trusts can
parents
and be‘it created
may
must
see
be in Wills
this
possible or when
as too young
for the trustees
an
testator of a
age at
to pension
which
provide scheme
to inherit
for his
a
transfer
considerable
widow by a lump a generous sum death
sum. In contrast,
trust benefit, arrangement to name
a Will can be
such just
drafted
as a couple this,
so that
without of
not only
the
examples.
can
fear
the
that
age
it They will
of inheritance
be dointerfered not have to
be
with contain
deferred
at huge cash
to say
expense and can,
21 or 25
in for
or
proceedings example,
contain
beyond,
but
under
a Will
the shares
also
1975 or
offers
Act.’ property. There can be more than one beneficiary
of a bare trust (i.e. your the grandchildren opportunity to as appoint a class). trustees All in all, to look they after can
your be children’s inheritance until they are old enough to receive it.
As
very
highlighted
flexible
in the
terms
Cowan
of what
case,
they
as
contain,
long as
who
trustees
the trustees
act in
are
Who
a
and
reasonable
who the beneficiaries
will look
manner
after my
and
are.
children
in accordance
They can be
if I am not
with
set up
around?
your
by
wishes,
anyone, not
just family members for the benefit of other family members.
there is little reason to overturn a trust arrangement. It should
For If both parents die before their child reaches 18 then a decision will
however both capital be noted gains that tax Mrs andCowan inheritance has indicated tax purposes, her intention the
need beneficiary to made as to who will
to appeal the
is treated
judgment
as the
so while,
beneficial
for now,
owner
the
of any
Courts
property
appear
which
to
have is heldresponsibility in the bare trust, for that notchild
the trustees. The transfer by the
be upholding this concept, it remains to be seen whether Mrs
going individual, forward. whoever If you that opt may to write be, into the trust is a gift for inheritance
Cowan will persuade them to alter the means of her inheritance.
a tax Will purposes then you but can noappoint inheritance one tax charge will arise immediately
and or more if theguardians individual to gifting look after into the trust survives for seven year from
the
To find out more about making a Will and other estate planning,
your date child(ren) of thein gift the then event noof
inheritance tax will be payable at all.
please get in touch with your usual contact at Wansbroughs or
both Capital parents’ gains tax deaths. might If, arise however, on a transfer into the trust if the asset
contact us on 01380 733 399 or via email at
you is not both cash. die Therefore leaving no aWill,
gift into a bank account in cash would not
wealth@wansbroughs.com.
the trigger decision a charge will be to capital made by gains tax.
the Once Court. funds A are Will incan thetherefore
bare trust, capital gains tax, if payable, is
payable
By Victoria Iremonger
provide peace by theof beneficiary mind. but they are entitled to their individual
annual exemption of £11,100 Paralegal and- similarly, Private Client income tax will be
payable by the beneficiary.
Wansbroughs Solicitors
If Bare you trusts would have like to many discuss other potential uses which you can discuss
making with us should a Will or you updating thinkDevizes: this your might01380 be of interest 733300to you.
existing If you would Will, then like please to consider Melksham: get any of01225 this in896100
more detail please
in contact touch with Wansbroughs us via email wealth@wansbroughs.com
inat
Devizes on 01380 733300, email
wealth@wansbroughs.com. www.wansbroughs.com
or your usual contact. Kathryn Smith Cowap
Devizes Office
Northgate House, Northgate
Street, Devizes SN10 1JX
Tel: 01380 733300
Email: mail@wansbroughs.com
www.wansbroughs.com
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