Trusts are often used to manage the inheritance of younger children who aren’t financially independent yet. But there are other reasons for setting up a trust.
Reducing liability to pay certain taxes
Setting up a trust allows you to protect your life insurance and ensure your beneficiaries get a higher amount. That’s because without a trust, your life insurance payout gets added to your estate and will be taxed. If it’s in a trust, you won’t pay IHT on it.
Managing your estate
If you have young children, you might want them to gradually receive their inheritance so that it’s useful to them over a longer period of time. You can also put conditions on the trust, so that it can only be spent on certain things like education or a first house.