As we get older you might sometimes think about the future and how our assets will be subject to inheritance tax on our death. It is important to make sure that you have an up to date will and that this is reviewed on a regular basis. Without your will you not give your children or loved ones guidance in terms of your estate. If you do not have a will then the rules of intestacy will apply. An effective way of tax planning to include a trust arrangement within your will.

Trusts offer flexibility and the ability to pass your wealth onto your children or beneficiaries. The effective use of trusts will enable you to give or pass your estate to the correct beneficiaries. However you have to be careful to ensure that you do not give away the asset, but in turn receive a benefit from it as this could be classed as a gift with reservation.

If the trust is set up in the correct manner it can be used to deal with a number of planning issues including passing your estate to children under the age of 18 or to someone who cannot for whatever reason manage their own affairs.

Many people use various forms of trusts to help with tax planning, especially for inheritance tax. This has become more of an issue recently as the values of peoples estates have improved due to the recent recovery in stock markets.

If you are looking for control and flexibility then a trust could be the answer. Providing it is set up correctly then the trustees will have the power to mange the trust assets effectively. This is a powerful way of reducing your estates tax liability.

Setting up a trust is not straightforward as there are several different types of trust available. The budget in 2006 changed the way trusts were treated from a tax perspective. Temporary rules were introduced, however if you have any existing trust in place it might be worth reviewing it.

If you are thinking about inheritance tax advice , why not find out more about Tax advice from Consilium Asset Management in Bristol.