Advisers put their faith in trusts

Many more people in the UK could benefit from setting up a trust, the findings of a new survey suggest.

Research published on 6 March by Skandia International, part of Old Mutual Wealth, revealed that 89 per cent of financial advisers in the UK that it questioned agreed that trusts could offer advantages over a will.

It also found that only around 22 per cent of UK advisers’ clients held a trust, compared to 60 per cent with a will, highlighting the potential for more people to benefit from holding a trust.

The avoidance of possible delays in obtaining probate was ranked as the number one advantage of a trust over a will, with benefits including easy access to proceeds from the trust to help surviving family members meet immediate financial liabilities, rather than having to wait months or years for the estate to be settled.

Potential exemption from inheritance tax for assets within a trust was ranked second and certainty and protection as the third highest advantage, with settlors able to specify exactly which beneficiaries might benefit whilst also remaining in control of the trust during their lifetime, giving them more certainty that their wishes are being met. Gordon Andrews, technical marketing manager, Skandia International, said: “Interestingly nearly half of all UK advisers surveyed (49 per cent) said they had used a trust instead of a will.

“However, it’s not a case of one or the other, but more a case of understanding why someone could benefit from having both a will and a trust in place to help meet all their financial needs. With only around 22 per cent of advisers’ clients holding a trust, there is a clear opportunity for more people to benefit from this aspect of financial planning.”

Palmers’ consultant Chris Mowat, a specialist in the creation and management of trusts, said: “Whilst trusts are not suitable for everyone, they do have a number of potential advantages. Our specialists can provide expert assistance to anyone who wishes to explore the position further or has other queries associated with their estate planning. For more information, please contact our Wills, Trusts and Probate team.’