The vast majority (89%) of British financial advisers have stated that trusts can offer advantages over a will, according to a new survey from Skandia International.
Less than a quarter (22%) of UK advisers’ clients hold a trust, compared to 60% who have a will.
The lack of probate involved in a trust was ranked by financial advisers as the single biggest advantage, with more inheritance tax options considered the second best feature.
Greater certainty and protection, the use of nil rate bands for 7 years and more privacy were also considered significant positive factors offered by trusts.
Because assets within a trust are held outside of an individual’s estate they are not subject to probate, helping families who need money urgently and who might otherwise need to wait months or perhaps years for the estate to be settled.
Inheritance tax is set at a significant 40%, and assets within a trust are potentially exempt.
A trust also enables the individual in question to determine precisely who the beneficiaries are, and a trust can continue on after death, whereas a will is designed to distribute assets upon death.
Those who prefer privacy might opt for a trust over a will as the latter is a public document, but a trust is a private document.
Gordon Andrews, technical marketing manager at Skandia International, said that it was interesting almost half (49%) of UK financial advisers surveyed indicated that they have used a trust rather than a will.
Andrews added that it was not necessarily an either/or choice, and that it was entirely possible to have both a will and a trust.
As so few (22%) have a trust, Andrews stated there was a clear opportunity for more people to benefit from them.