WBD's private client partner Edward Stone, is working with STEP, the global professional association for practitioners who specialise in family inheritance and succession planning, to promote the beneficial role that trusts play in wealth planning across the world. Edward is also a member of the steering committee for STEP's International Client Global Special Interest Group.
Drawing on expertise from wealth management practitioners like Edward, STEP published its latest market report this month (February). Entitled The Social and Economic Benefits of Trusts, the analysis aims to improve understanding on how and why trusts are used and address common misconceptions by presenting the positive evidence from the experience of trust practitioners across the world.
The full report can be read here and will be useful reading for anyone considering establishing a trust. It considers how the inherent flexibility of trusts has enabled the role of trusts and trustees to evolve from their origins in the Middle Ages, when Crusaders sought to ensure their families were supported from their lands whilst they were away, to the important and varied yet often misconceived and criticised role they play today.
The report finds that trusts have demonstrated their adaptation to change and ongoing societal evolution to provide many benefits alongside their proven core value of managing and transitioning assets. Modern trusts are used in the UK and elsewhere in a variety of ways from protecting vulnerable persons, preventing the destruction of wealth through divorce and other family conflicts, supporting philanthropy through charitable trusts, safeguarding people's retirement through pension trusts and to promoting business ownership through employee ownership trusts.
STEP found no clear evidence that trusts are inherently more subject to abuse than other aspects of the financial system, with the evidence in fact showing that the abuse is less likely compared to other vehicles. The report also dispels the myth that trusts are reserved only for the super-rich with around 80% of the estimated 2 million personal trusts administered in the UK today have a value of less than £1 million and half of these less than £325,000; and costs are not a prohibitive factor in setting up a trust.
Edward Stone of WBD commented:
"The report is a compelling read, it enhances understanding of trusts generally and seeks to address common misconceptions, highlighting the key benefits of trusts which have evolved to fit in today's society and are a safe vehicle for the preservation of wealth as well as the protection of the most vulnerable in the community."
If you are interested in establishing a trust and would like to know more about how a trust could be used to support your personal wealth planning goals, please get in touch with your usual contact or any other member of our Private Wealth team.