If your children are young or in full time education you should consider a discretionary trust when having your will drafted.
Such a trust should be created where your children would not be able to or would not wish to manage the share of the estate themselves either due to being too being too young or due to a mental or physical incapacity.
A discretionary trust arises where the property is given to the trustees who have discretion to apply the income or capital or both for the benefit of the beneficiaries in such manner as the trustees in their discretion think fit. Therefore, great care must be taken in defining those who are entitled under the trust. Should one of your children suffer from physical or mental incapacity a separate trust may have to be created for them. Trustees may require significant powers, such as the power to Run a Business, however this depends on your particular set of circumstances. You can if you wish provide the trustees with a non-binding letter of wishes which can be left with your will and can be used as a guideline by your trustees.
A discretionary trust can be very beneficial from a tax perspective as appointments can be made from the trust in a tax officiant manner and the trustees can seek to ensure that your children will benefit from various tax reliefs depending on the circumstances.
Discretionary trust provides great flexibility for the timing of an inheritance and allow a beneficiary to arrange their affairs in the most tax efficient manner.
Discretionary trust tax is applied to the trust once the youngest child reaches 21 years (or 18 if not in full-time education). Most discretionary trusts will be wound up prior to this time. Given the wide sweeping powers that are given to trustees great consideration must be given to who you would like to act as trustees. Further, very careful drafting is required in dealing with the powers that are been granted to the trustees.
The individuals that you appoint to act as guardians of your infant children do not need to be one and the same as your trustees. You will require a minimum of two trustees.
If you wish to make a Will or require advice/further information in relation to the above, please contact Ian Sheehy, Partner, or Fionnuala Keating, Consultant Solicitor, Private Client Department, Sellors, Solicitors;- firstname.lastname@example.org , email@example.com