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There’s been recent media attention surrounding property trusts, sold to people as a promise to “escape legal fees” upon someone’s death. But, all is not as it seems and people should think twice before entering into such an agreement.
Several property trust companies have started to up their marketing efforts, following recent news that the Government plans to introduce thousands of pounds worth of probate fees. Some property trusts promise to bypass probate altogether passing to your beneficiaries through the trust, ultimately avoiding the need for surviving family to pay expensive probate fees.
The controversial new “death tax” could result in some of the largest estates paying up to £6,000. The rises are yet to be made law, however, it is expected to be introduced in Parliament later this year. Whilst many may start thinking about estate planning, people should be thinking carefully before diving into anything and making rash decisions before doing careful research.
Many of these property trusts will incur charges to be set up, often up to £3,000. However, not only could the pending law be open to significant opposition – and even rejection – it could also leave you worse off. Currently, it costs £215 to apply for probate or £155 for solicitors. For those who choose to go ahead with planning for a trust fund to “avoid the fees”, they could actually end up paying significantly more.
It also worth considering that the new fees are charged on a sliding scale, so people should always weigh up how much they are potentially going to be charged against the cost of setting up the trust along with on going administration expenses and potential taxes.
Of course, trusts do offer a benefit in the right circumstances. We’d always recommend getting the right professional advice, so you should speak to your solicitor, accountant or financial planner if you are considering setting up a trust.
For any further advice relating to your own legal position, or if you are thinking about planning for your estate, probate or writing your will, contact Downs Solicitors to see how we can help.