"We want to wind up our trust – we heard that the Government has cracked down on trusts and we never really understood our trust anyway”
Well! We hear this quite often from clients and others – and there is a lot to discuss. There’s a bit to unpack in this – firstly, the “never really understood our trust”. This is a worry but it could easily be addressed by more regular liaison with one’s professional advisors, by being more active in managing trust affairs (eg have an annual meeting of trustees) and by doing some reading (costs nothing!).
When we assist clients in forming new trusts we try to explain the workings but time is limited and there is nothing quite as good as “time in the saddle”. Once a client has a trust and gets the paperwork organised and a regular routine of dealing with trust business, it gets easier.
But the bigger issue in our opinion is the thought which many have, that trusts are now, somehow, no use. Far from it! In many areas of life a properly established trust can still achieve great results, but it depends on what the original aim was and if things were done correctly. With some of our business clients we have observed that the original purpose might have been creditor protection (if the business failed) but now in their retirement (after having a successful business for many years) the purpose of the trust has changed. In later years, for many people, the trust becomes a really flexible way of passing on wealth, in a safe way, to the next generation.
So when a client tells us that they want to wind up their trust, our first response is “why” and check that out. Next we check if the trust is now serving some new purpose. And last of all, as a general rule, we suggest that there needs to be a really compelling reason to wind up a trust, not just something like “it seems too complicated”.
Your situation will be different from others, so it is important that you get advice tailored to your situation. The Life Law team at Godfreys Law is well placed to help with this consideration.
Real people. Real solutions. Real trust.
