Lifetime Giving, Trusts & Family Charters
The shocking tale reported in the Daily Mail may put people off the idea of giving away their assets to their children before death and perhaps could make one sceptical about trusts. Of course Manny and Brigitta Davidson’s story and the level of wealth they passed to the children via trust funds (around £600 million) is well outside the wildest dreams of the average middle class couple. Yet many people who would class themselves as such do have estates worth in excess of the levels covered by the nil rate band and new residence nil rate band for Inheritance Tax.
I would, therefore, urge people not to simply ignore the opportunities for lifetime planning that gifting offers or dismiss the use of trusts in that planning. With specialist advice lifetime gifting, using the often underused exemptions and reliefs offered in law, is perhaps one of the easiest and most rewarding ways of helping to reduce your Inheritance Tax liability on death.
Trusts are frequently viewed as complicated and expensive to run but again with the right guidance they can be valuable tools to provide for your family whilst enabling you to retain an element of control.
In the article about the Davidson’s they comment on how wealth and luxurious living spoilt their children and one often hears the old adage about families going from “riches to rags” in 3 generations. That is one reason why I often work with wealthy families to develop a “Family Charter”. That is a document worked on and agreed by all generations about the way they will manage and protect hard-won wealth.
If you would like any more information on how lifetime gifting, the use of trusts or Family Charters might benefit you, please contact our expert Partner and solicitor Carla Brown on 01202 057716 or send an email enquiry.