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With a Living Trust, you can continue to protect your family, even after youre gone: delay distributions until children reach a certain age or graduate; make sure money doesnt fall into the hands of creditors and ex-spouses; & make sure that special needs children still qualify for benefits. Restrictions on Use: Bloodline trusts can impose restrictions on the use of the assets, which can be a concern for the beneficiaries. Many people wonder whether it is a good idea to place their house in a trust. Tax planning A family trust is taxed at the highest income tax rate, which is 45%. Copyright 2023 Trust Point Inc. Professional Trustee: Cons 1. With partnerships, you may transfer your share in the partnership to a living trust. Are You Ready to Open a Child Care Business? We once represented a client whose Probate lasted for 8 years! Bloodline Wills Explained | Guides | Unite Wills The father was killed instantly. Incorrect administration may cause the loss of benefits. Distributions to disabled persons clause. However, trusts can also be complicated and have a specific shelf-life of up to 80 years, meaning the protection of family funds isnt indefinite even after paying administration and set-up fees! Unlike a revocable trust, an irrevocable trust cannot be amended or revoked. A Trust gives the family one less problem to face when someone becomes sick. When investments are included in a discretionary trust, the investment technically belongs to the trust rather than the beneficiaries so if anyone in the family goes bankrupt, creditors cant seize the investments. Weve put together a glossary of a variety of additional trusts so you can weigh the pros and cons of each and decide if any of these may work for you. In this article, we share three pros and two cons to opening a trust, plus provide some advice It is important to note that there is no way to completely bypass probate. Review these accounts for a payable-on-death (POD) option that allows you to add primary and secondary beneficiaries. Pros and Cons Family trust elections are particularly relevant where a trust makes a loss or distributes franked dividends/distributions. Probate is a public process, so anyone can see the size of your estate (sometimes what you actually owned), who you owed debts to, who will receive your assets, and when they will receive them. Not suitable for small charitable contributions. In conclusion, bloodline trusts offer a range of benefits, but they also have their drawbacks. 1. There are, of course, advantages and potential disadvantages to bloodline trusts in the UK. It is specifically designed to keep assets within a family. The trust protects the inheritance of your children and their descendants.