Why put your house into trust?
There are many reasons why you might want to put your house into trust in the UK. Some of the most common reasons include:
- To avoid probate: Probate is the legal process of administering a deceased person’s estate. It can be a lengthy and expensive process, and it can also be stressful for your loved ones. Putting your house into trust can help to avoid probate altogether.
- To protect your assets: If you put your house into trust, it will be owned by the trust, not by you. This can help to protect your house from creditors and other potential liabilities.
- To reduce your inheritance tax liability: Inheritance tax (IHT) is a tax that is paid on the value of your estate when you die. If your estate is worth more than the nil rate band (£350,000 for individuals in 2023/24), your beneficiaries will have to pay IHT on the excess. Putting your house into trust can help to reduce your IHT liability, as the value of the house will be removed from your estate.
- To control how your house is passed on to your beneficiaries: When you put your house into trust, you can specify how you want it to be passed on to your beneficiaries. This can be useful if you have complex family arrangements or if you want to ensure that your house is passed on to certain beneficiaries in the event of certain events, such as divorce or bankruptcy.
There are different types of trusts that you can use to put your house into. The type of trust that is right for you will depend on your individual circumstances and needs. It is important to speak to a qualified estate planning professional to get advice on the best way to put your house into trust.
Here are some specific examples of how putting your house into trust can be beneficial:
- Protecting your house from care home fees: If you need to go into a care home, your local council will assess your assets to determine whether you are eligible for financial assistance. If you have assets above a certain threshold, you will have to pay for your care yourself. Putting your house into trust can help to protect your house from care home fees, as it will no longer be considered to be one of your assets.
- Providing for a disabled child: If you have a disabled child, you may be concerned about how they will be provided for after you die. Putting your house into trust can help to ensure that your child has a financial safety net. You can specify in the trust deed that the income and capital of the trust should be used to provide for your child’s needs.
- Passing on your house to your grandchildren: If you want to pass on your house to your grandchildren, putting it into trust can be a good way to do this. You can specify in the trust deed that the house should be passed on to your grandchildren when they reach a certain age or when they meet certain criteria, such as graduating from university.
If you are considering putting your house into trust, it is important to speak to a qualified estate planning professional to get advice on the best way to proceed.
If you’re based near Middlesbrough or Teesside or in the areas of Stainsby, Normanby, Stainton and Billingham or anywhere in the surrounding area, we can assist with any trust guidance you may require please contact 01642 493101 or email email@example.com. Please click here to learn more about Wills.