Have you got full trust in your trust? Review your legal and financial future

Have you got full trust in your trust? It may be time for a review of your personal legal situation, writes the team at Gibson Kerr.

As personal law solicitors, we have advised many clients on setting up trusts. They can be a useful tool to keep control of more of your money or assets while passing them on for the benefit of children or grandchildren, making sure it gets to them when they need it and potentially reducing inheritance tax liabilities for your family to pay after your death. 

However, it’s important to note that, once set up, trusts should not simply be forgotten about, and we recommend regular reviews to ensure they are still fit for purpose and that the trustees are meeting all of their obligations.

In particular, if you set up your trust with a firm of solicitors that has since gone into administration – as was the case recently with clients of McClure’s Solicitors, Glasgow – you should urgently undertake a review of your trust through a legal professional to make sure it is all in order and as you expected. If the former solicitors themselves were the trustees, you may now want to update this and have new trustees appointed.

There are several reasons why you should regularly undertake a review of your trust arrangements, and we’ve outlined these below, to help you understand when you might need to look into it.

Have your circumstances changed?

As time passes, our personal and financial circumstances can change, and this could have an impact on whether a trust set up in the past still reflects your wishes. For example, life events like deaths, births, marriages or divorces in the years since a trust was made may make a difference to your wishes. In particular, you will want to ensure that the beneficiaries named in the trust are still correct and have the opportunity to add any new ones, if the trust allows that.

Is it maximising tax efficiencies?

One of the main benefits of setting up a trust is the potential tax efficiencies it provides. However, over time, with changes in laws and circumstances, or even with poor advice in the first place, your trust may not be working as hard as it could be to minimise any tax liabilities. A professional review can identify any potential issues and rectify them.

Are your trustees fulfilling their duties?

A trustee is designated to look after the well-being of the trust, (including conducting reviews when needed). A review of the trust will tell if they’ve been doing this successfully; if not, you may need to consider appointing a new trustee. In the case of McClure’s solicitor’s clients, this should be looked at urgently.

Has the law changed?

Trust-related laws and regulations may change over time. Reviewing the trust makes sure that it remains legally compliant, avoiding any potential legal problems or challenges in the future.

Was your trust correct?

Unfortunately, in some cases, trusts might not have been set up as well as they could be. By reviewing the trust with a reputable legal expert, you can spot and take care of any possible problems or worries, like unclear wording in the agreement or disparities in asset ownership.

Trust us to help

At Gibson Kerr, our team of experienced personal law solicitors pride ourselves in providing the best advice to our clients in setting up and reviewing their trust arrangements. We will consider all circumstances to ensure that your trust is working as best it can for you, along with helping you with all areas of estate planning. If you have an existing trust you would like to review, or want to set up a new one, contact our Personal Law Team on 0131 202 7516 or email [email protected], or find out more here.

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