Learn about how an Acrobat Trust from WAY Trustees should be an essential part of your estate and legacy and wealth planning.
Many of us are aware of friends and relations who have not made even the most basic of preparations for life’s potential difficulties. Illness, loss of mental capacity, death…few of us know families who are not affected by sudden, radical changes of circumstance.
This is where inter-generational wealth planning meets estate planning: ensuring that your family’s collective wealth works harder for the benefit of all, while fulfilling the intentions of you, the settlor.
The wording of the Acrobat Trust from WAY Trustees, permits (but does not oblige) the trustees to revert up to 10% of the initial trust assets to the settlor on an annual basis. Any full or partial reversions not distributed to the settlor can then be deferred by the trustees for distribution at any one or more future anniversaries.
Of course, there is little point in establishing a separate segregated pool of assets in this way, simply to take them back into your taxable estate (if not spending any reverted money). This is not what is intended, of course and reversions are mostly deferred, but should the settlor have any unanticipated need for financial support, be it some kind of personal crisis or a health or long-term care need, then the trustees will seek to support those needs as appropriate.
At the same time any level of funds can be made available to your family (at the discretion of the trustees, having referred to you and/or your Letter of Wishes) at any time, for any purpose and not simply as a result of a crisis.
WAY Trustees believe there are three fundamental elements to consider when thinking about your legacy:
- A comprehensive and well thought out Will
- The appointment of trusted attorneys via a Lasting Power of Attorney, potentially governing your financial and health issues in later life.
- A Family Reversionary Trust to ensure your assets are protected and deployed, in accordance with your wishes, during your lifetime (before) and after your demise, but also to safeguard you and your family from unnecessary Inheritance Tax (IHT) in the future.
Most people are familiar with the first two. However, only the very aware, tackle the third, which could be the most important step of all. It can preserve your family wealth into the far-reaching future of your descendants, thereby securing your legacy.
There are of course many more reasons to organise a Family Reversionary Trust, and in recent times, the attraction to mitigate IHT has been a major draw. In our view, the creation of a discretionary trust can offer many more benefits to you and your family both during your lifetime and beyond including:
- Allowing trustees to make urgently needed funds immediately available to family, including after your demise, without the need to wait for probate (which can take several months and in more extreme cases years).
- Permanently protecting family assets so that they are not inadvertently dispersed following a marriage breakdown for example.
- Differentiating between beneficiaries in post-death support for your spouse (or civil partner) and children (whether natural, adopted or step) in line with your ongoing wishes.
- Offering financial security and support to you in the event of failing health and/or the need for care later in life.
- Mitigating IHT on an inter-generational basis.
- Plus, many other benefits as you will discover later
In essence, gifting accumulated wealth into a Family Reversionary Trust is a straightforward way of laying down a guide for how and in what circumstances those assets can be used for your needs and the benefit of your family members, before and after your passing.
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