ESTATE PLANNING, INHERITANCE TAX PLANNING AND TRUSTEE INVESTMENT ADVICE
WPS has built a team of highly qualified independent financial planners who have both the experience and expertise to deliver a high-quality advice service to both individuals and trustees.
Estate and Inheritance Tax Planning
Ensuring that your financial affairs are in order and structured correctly is essential when considering passing funds down to the next generation. Inheritance tax is a tax applied to estates on death; however, there are a range of legitimate financial planning tools our experienced advisers use to mitigate this liability.
+ Advice around Lifetime Gifts and Potentially Exempt Transfers
+ Gifts out of Income
+ Gifts into Trust using Package Investments
+ Will Planning and Powers of Attorney
+ Specialist Investments Products (business property relief)
+ Life Assurance and Trusts.
Your WPS Wealth Ltd adviser will work alongside fellow professionals such as lawyers and accountants to ensure there is a joined-up approach to estate planning.
Trustee Review Service (TRS) In Practice
Following a letter of instruction from you, WPS will allocate an experienced TRS adviser to review all Trust assets held within the Trust. The review will include a review of the Trusts objectives, the Trustees attitude to risk, the beneficiary’s financial situation and the timescales involved. Each investment within the Trust will be individually assessed to confirm its appropriateness. An initial report will be provided on a fixed fee basis and confirmed in writing and in advance of work being completed. If funds are subsequently transferred to the TRS the initial fee with be significantly discounted.
Act in accordance with trust deed
A trustee must act in accordance with the terms of a trustee deed and general law. A trustee must ensure that all funds and property due to the trust is obtained and is held always in the names of a trustees, properly insured and only used to benefit the persons named in the deed as entitled to benefit.
Act prudently, honestly and responsibly
The duty of a trustee is to use, in relation to management of the trust, the reasonable care a prudent person would exercise in relation to their own finances, including obtaining appropriate professional advice on matters outside their personal experience or knowledge. A trustee is expected to bring to bear any skills and expertise he may have and hence a higher duty is placed on a professional as opposed to a lay a trustee. Trustees should record the decisions they take and reasons behind them as these could be challenged in court by a beneficiary years later. Also, for certain types of discretionary trusts the trustees may be called upon by the Inland Revenue to produce records showing that they have been reviewing annually the way in which the trust funds are being used between the potential beneficiaries.
A trustee must always act in the best interests of the beneficiaries as a whole and this overrides any personal, family, business, religious or ethical interests or beliefs they may hold. If a conflict of interest arises then a trustee should excuse himself from voting on the decision or follow the independent professional advice sought. This can be difficult for the non-professional a trustee if there are internal family conflicts or pressures. A trustee must not be seen to be obtaining any personal profit. Trustees other than a trustee acting in
a professional capacity are unable to charge for their services. Similarly, a trustees must not be seen to profit by them or their family or associates, buying or selling assets to or from the trust. Where trustees are given discretion by the trust deed, they must fully acquaint themselves as to the terms of that discretion and any limitation placed by statute or the trust deed. The trustees must record their decision and reasons for the decision. Any decisions reached must be fair to both the interests of the current and future beneficiaries.
Trustees must keep themselves up to date with any changes in the Law and taxation of trusts, as ignorance of any changes is not normally a defence to a future claim for loss suffered by a beneficiary due to a trustee’s being unaware of a change.
Duty to invest
The Trustee Act 2000 imposed specific duties in relation to the management of investments including the right (unless expressly prohibited by the trust deed) to invest in any asset a reasonable prudent man would consider for his own investments. The Act placed a duty on the trustees to take proper professional advice appropriate with the nature and value of the trust fund. Failure to obtain appropriate advice or follow it can leave a trustee liable for reimbursing the beneficiaries from their own finance’s years later any shortfall or loss between the value of the fund and the value the fund would have been if advice had been sought or followed.
Trust Management
Trustees must inform beneficiaries and, if they are under eighteen or disabled, their parents or carers, as to the existence of the trust and their entitlement, unless the Settler has indicated to the
contrary. The trustees are required to provide annual accounts to all beneficiaries as to the value of the trust, detailing transactions during the previous year. The trustees must notify the Inland Revenue of the existence of the trust and ensure tax returns are made and the tax paid during the duration of the trust. The trustees must ensure any income received and which is due to a beneficiary is paid promptly.
Conclusion
The law therefore imposes responsibilities on a trustee which can be complex and time consuming and for which only a person performing his normal professional duties can normally be paid for. Should you be considering appointing a trustee or have been appointed as a trustee and are unsure how to act in a specific situation, you should seek professional advice.
