This article will explain the biggest mistake parents make when setting up a trust fund (UK Edition).
Elite families have known how to protect their assets for thousands of years.
It’s about time you people caught up.
What is a Trust?
Officially: “A trust is a private, legal arrangement in which assets are held by trustees for a beneficiary.”
It’s basically a place for wealthy people to store assets so that Caesar can’t get his grubby little hands on them when they die.
How Much Does It Cost To Set Up A Trust?
It’s about £4k to set up a lifetime trust in the UK.
So it’s not cheap.
But, it will help your children avoid paying 40% inheritance tax on your estate.
So you can see why it’s such a good investment.
Is Having A Trust Fund Really That Important?
Yes, absolutely.
In the UK, inheritance tax, or as I prefer to call it, the death tax, is 40% of anything above £325,000.
Forty bloody percent.
So if you leave a mortgage free house worth £1 Million to your son when you die, he would have to pay 40% of the remaining £675,000 to the government.
And if he doesn’t have £270,000 in cash lying around?
Then he is forced to sell your mortgage free house and buy a new house, with a new mortgage, using the leftovers.
It’s a trap
It’s BY DESIGN.
This is how the lifelong cycle of peasant debt slavery gets passed from generation to generation.
Starting a family trust is the solution to this problem.
You owe it to your children to get this right.
The Biggest Mistake Parents Make When Setting Up A Trust Fund UK
There are actually six classic mistakes parents make when setting up a trust fund.
Here’s everything you need to know:
Mistake 1: Gifting Property To Your Children
(or putting them on the deed of your principal residence for any reason)
Why is this a major mistake?
Firstly, it could easily trigger a capital gains tax event (unless they’re living with you at the time)
And secondly, if your child gets divorced, goes bankrupt or gets sued.
The gold-digging ex-wife could claim half of your house… as her property.
The courts could also take your house to pay your child’s debts.
This wipes out 100% of the family wealth in one moment.
To avoid this disaster, transfer your assets into a lifetime trust.
This makes them IRREVOCABLE & UNTAXABLE.
All you have to do is name your kids as trustees and beneficiaries.
So they can inherit your life’s work with no theft from the state.
You’re welcome.
Mistake 2: Leaving Assets To Your Partner Or Children In A Will
That’s broke boy behaviour
Instead, put everything into a lifetime trust and name your children as the beneficiaries.
This avoids all inheritance tax if done it seven years before you die.
Talk to your family about it today.
Mistake 3: Naming Family Members As The Beneficiaries Of Your Life Insurance Policies
That’s INSANE.
Instead, create a life insurance trust and make sure your life insurance payout goes into the trust and NOT to your spouse or children.
(Life insurance trusts are FREE btw)
This prevents the government stealing half the payout!
*People pay niche lawyers thousands of pounds for this info*
Mistake 4: Putting Your Partner/Children’s Name On Your Bank Account
Instead, set up a lasting power of attorney and name your partner/children as your attorneys.
This is a legal document which allows your kids to make decisions that benefit the family, if you lose the mental capacity to function.
After you die, without this, your kids will have to pay up to £6k to unfreeze your bank account.
This also allows them to legally care for you as you get older, with your money, without the costs having to come from your estate after the fact.
It’s a win-win for everyone involved.
Mistake 5: Forcing Your Family To Go Through Probate
(The legal process of splitting up assets after a citizen dies)
Your families assets are YOURS.
Why would you let the government take them… and then decide what they think is best to do with them?
Asking for trouble chaps.
The family could be without your assets for months or even YEARS.
This has a huge opportunity cost from an investment perspective and is excruciatingly stressful and divisive to live thorough.
Once you’ve put an asset in a lifetime trust, it becomes immediately accessible to your beneficiaries after your death.
You’d be silly not to.
Mistake 6: Not Utilising an Offshore Trust
I shouldn’t tell you this but hey, why not…
You can set up an OFFSHORE TRUST as well.
This helps you protect your assets if you get sued.
For actionable info, search for “a Cook Islands trust” and get a specialist attorney.
These trusts are useful because courts can force you to disclose ALL of your assets and you have to comply without lying.
(To avoid being imprisoned for perjury.)
This is where the offshore trust/asset protection trust comes in.
It’s a place to keep stuff that the court can’t claim, once you’ve declared it to them.
But remember, you should only move assets offshore, if you intend for them to stay there permanently.
It’s not easy to move assets back in and out like a yo-yo.
