What happens to my trust when I die?
Many people worry about what will happen to their family trust when they die, but interestingly, it is on death that the trust proves its greatest benefits.
It is, after all, a device in which to build (and protect) wealth so that when you die, there are no taxes to pay and the wealth that you built during your lifetime is there as a legacy for your family and for future generations.
So let’s look first at what doesn’t happen when you die – the trust pays no tax as a consquence of your passing. Compare this to the 35% to 55% that your estate would have paid without the trust.
And what does happen? Just a few things.
- In your Will you will have appointed a replacement trustee or trustees. They will take your place as trustee of the trust so you need to think carefully about who you want to appoint.
- The letter of wishes that you attached to your will is available to guide the trustees if they are uncertain about what to do under certain circumstances.
- That’s it. You can rest in peace.