These are Discretionary Trusts and are a very flexible form of Trust which is used to protect assets for beneficiaries on your death. This is because it may not be the ‘right time’ for them to inherit for the following reasons:
In these Trusts, the trustees have discretion over how, when and for whose benefit to use all of the capital and income of the Trust fund. You leave instructions for the trustees as to how the assets are to be used.
What risks can a Lifeline Family Inheritance Trust potentially avoid?
Bankruptcy: If the beneficiary of your Will is bankrupt or in danger of becoming bankrupt, the risk is that a gift from your estate might be paid directly to the beneficiary’s creditors and not actually benefit those you wanted it to.
Divorce: The assets left from your estate to the beneficiary might pass to a former spouse rather than the person it was intended for.
Disability: If a beneficiary is disabled in some way and needs help managing the assets left to them or they are in receipt of state benefits, the assets left to them may be misspent or used to reduce or replace the state benefits provided.
Generational Inheritance Tax: The assets do not fall directly into the beneficiary’s estate, further taxation charges will not be applicable to these assets on the beneficiary’s death.