Assets can be put in an appropriate Trust, thereby no longer forming part of the estate. There are many types of Trust available and many are simple to set up.
They usually involve parents (settlors) investing a sum of money into a Trust. The Trust has to be set up with trustees – a suggested minimum of two – whose role is to ensure that on the death of the settlors, the investment is paid out according to the settlors’ wishes. In most cases, this will be to children or grandchildren.
The most widely used Trust is a Discretionary Trust, which can be set up in a way that the settlors (parents) still have access to income or parts of the capital. It can seem daunting to put money away in a Trust, but it can be unwound in the event of a family crisis and monies returned to the settlors via the beneficiaries.