Bare trusts

Our expert legal team is experienced in creating and managing bare trusts, ensuring that your assets are secured for years to come.

A bare trust is a straightforward yet effective tool for asset protection and estate planning, so it is no surprise that it is one of the most commonly used trusts. At Culver Law, we understand the importance of protecting your assets and ensuring your estate is managed according to your wishes. Whether you are considering setting up a bare trust or need advice on managing one, our team of experienced legal experts are here to help.

Understanding Bare Trusts

A bare trust, also known as a simple, naked, or absolute trust, is a type of legal arrangement with no investment limit, where the beneficiary has an immediate and absolute right to both the capital and income of the trust once they turn 18 years of age (England and Wales), or 16 years of age (Scotland). The trustee holds the assets in their name but has no discretion over them unless they can prove any withdrawals are in the interest of the beneficiary. This makes bare trusts a transparent and flexible option for straightforward estate planning needs.

Potentially Exempt Transfers (PETs) apply to bare trusts when assets are gifted into the trust. A PET allows the transfer of assets without immediate inheritance tax (IHT) liability, as long as the person making the gift (the settlor) survives for seven years after the transfer.

Is a Bare Trust Right for Me?

This type of trust has several uses, making it a suitable choice for most families. They are particularly useful for those who are looking to:

Transfer assets to children or grandchildren, ensuring they receive them directly.
Keep the estate planning process simple while still protecting assets.
Reduce the complexity and costs associated with trust management.
Provide for loved ones in a tax-efficient manner.

The Benefits of a Bare Trust

There are several benefits associated with bare trusts, which represent why they are such a popular choice. These benefits include:

Simplicity: Bare Trusts are easier to set up and manage compared to more complex trust structures.
Full Control for Beneficiaries: Beneficiaries have the right to demand the assets at any time once they turn 18 years of age, providing them with full control.
Tax Efficiency: Assets held in a bare trust are treated as if they are owned directly by the beneficiary, offering certain tax advantages.
Asset Protection: Despite being simple, bare trusts can still provide a strong level of asset protection, particularly in shielding assets from creditors. Also, unlike with a Junior ISA, bare trusts have no investment limit.

How Can Our Team Help You?

At Culver Law, we offer comprehensive services for establishing and managing bare trusts, taking the stress away from you during estate planning processes. Our team will work closely with you to:

Assess Your Needs: We’ll evaluate your financial situation and goals to determine if a bare trust is the right solution for you.
Draft the Trust Agreement: We’ll prepare all necessary legal documents to ensure your bare trust is legally sound and in accordance with your wishes.
Ongoing Support: We offer continued support and advice to ensure the trust operates smoothly and in compliance with legal requirements.

Our Trusts Team

London Office

44 Southampton Buildings, London. WC2A 1AP

Michael Culver

Michael is a Court of Protection panel deputy for property and affairs. He is responsible for managing the money and assets of people unable to manage such matters for themselves. Michael has also acted as a health and welfare deputy for a number of clients, making decisions over matters where they are unable to make decisions for themselves. Michael’s expertise in Statutory Wills, including a vast knowledge of Will writing and experience working with the Court of Protection, is a valuable asset to solving your Statutory Will queries.

Contact:

Tel: 0203 633 6226
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Cambridge Office

9 Hills Road, Cambridge. Cambridgeshire. CB2 1GE

Amy Wallhead

Amy joined Culver Law as a partner in March 2023. She advises on all aspects of non-contentious Private Client work including Wills, Trusts, Estate Planning and Probate and specialises in advising older and vulnerable clients.

Amy has a particular interest in understanding dementia and related illnesses which she uses to assist her clients to be involved in decisions relating to their affairs for as long as they are able. Amy’s expertise in Wills, coupled with her specialising in the needs of vulnerable clients, reflects the depth of knowledge and experience which you will receive by working with us to solve your Statutory Will problems.

Contact:

Tel: 01223 653010
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Why Choose Culver Law?

Our London and Cambridge-based staff are committed to providing the highest level of legal service, tailored to your unique needs. Here’s why we are the right choice for your trust law matters:

Personalised Solutions: We understand that no two clients have the same goals or circumstances - that’s why we offer bespoke legal solutions designed specifically for your situation.
Client-Centred Service: Our approach to legal services is rooted in putting our clients first. From your initial consultation to the completion of your legal matter, we prioritise clear communication, transparency, and responsiveness.
Compassionate Approach: We recognise that trust and estate planning can often involve sensitive decisions about family, finances, and the future. Our team offers an understanding approach, ensuring that your concerns are heard and respected.
Specialised Expertise in Trust Law: With years of experience in trust law, we bring expert knowledge to every case, staying up-to-date with the latest legal developments to ensure that your trust complies with all relevant regulations.

Create a Legally Sound Bare Trust with Culver Law

Working with our legal team means you’re working with a partner dedicated to your success, with the knowledge, compassion, and commitment to guide you through every step of the trust and estate planning process. Regardless of the type of trust you’re looking to set up, please get in touch with us to discuss your individual needs and wishes.

FAQs

What are the costs associated with setting up a bare trust?

The costs of setting up a Bare Trust can vary depending on the complexity of your situation and the services you require. At Culver Law, we offer transparent pricing and will provide a detailed estimate during your initial consultation.

Is a bare trust suitable for transferring assets to minors?

Yes, a bare trust is particularly suitable for minors since they cannot access any of the assets until they reach the age of 18, at which point they gain full control. This offers a simple way to manage assets for the benefit of children and grandchildren until they are of a responsible age.

What are the tax implications of a bare trust?

All the income generated within a bare trust is taxed on the beneficiary. Any capital gains tax (a tax on profits of certain items) is charged on the beneficiary, and the assets form part of the beneficiary’s estate for inheritance tax (IHT) purposes; this may mean they need a Will.

Can a bare trust be revoked or changed?

Generally, a bare trust is irrevocable once it is established, because the beneficiary has a vested right to the trust assets. However, specific terms in the trust deed might allow for changes under certain circumstances, but these must be established with a legal expert at the creation of the trust.

How Is a Trust Registered?

A trust is registered with HMRC through the Trust Registration Service (TRS). Trustees must provide details about the trust, including the settlor, beneficiaries, and assets. Registration is typically required for most taxable trusts or those with certain UK tax liabilities.

types of trust

Get in touch

T: 0203 889 0166
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Authorised and Regulated by the Solicitors Regulation Authority. SRA Number: 820401.

Culver Law, London
44 Southampton Buildings
London
WC2A 1AP
0203 889 0166
Company No. 13313009

Culver Law, Cambridge
9 Hills Road
Cambridge
CB2 1GE
01223 653010

Any information on this website, whilst intended to be accurate, does not constitute legal advice.

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