Quilter 3 Giving the ones you love the best start in life You want the best for your loved ones whether this means ensuring they receive the best education by paying for their school or university fees, helping them with the cost of their wedding or to get on the property ladder, or even by just ensuring your wealth is passed to them. This document describes how you can use the Best Start in Life Trust, in conjunction with a Collective Investment Bond, to provide tax-efficient benefits for those you care about. What is a trust? A trust allows you (‘the settlor’), to transfer money out of your estate and entrust it to the trustees you have chosen. The money transferred becomes the ‘trust fund’. The responsibility of the trustees is to manage and eventually distribute it to those you have nominated to benefit from it in the future (the ‘beneficiaries’). Beneficiaries can be specific individuals, or groups of people, such as grandchildren or other family members. The Best Start in Life Trust combines the flexibility and control of a ‘discretionary trust’ with the option to use a ‘bare trust’, if necessary, to improve tax efficiency when distributing the trust fund assets. For more information about trusts and their uses see our brochure – Your guide to UK inheritance tax and trusts. What’s the difference between a discretionary and a bare trust? When you set up your trust fund, you will have particular beneficiaries in mind but you may also like to include future beneficiaries, for example future grandchildren. A discretionary trust provides for a wide range of potential beneficiary classes including grandchildren. You can also specify other classes of beneficiaries as appropriate, for example nephews and nieces. * By contrast a bare trust is one where the beneficiaries, and their share, are specified at the outset and cannot be changed. Nor can beneficiaries be added in the future. Control and flexibility The beneficiaries of a bare trust can demand their share of the trust fund once they reach age 18. This may not be what you intend to happen. With a discretionary trust, no one is automatically entitled to receive benefits. It is for the trustees to decide who will benefit and when. They retain complete control over the trust fund, regardless of the age of any potential beneficiary. The Best Start in Life Trust combines the best of both approaches. It enables the trustees to control who receives benefits and when, while at the same time ensuring that payments from the fund can be made in the most tax-efficient way, regardless of the age of the beneficiaries. * You should always check the trust wording to ensure that the class of individuals you would like to potentially benefit are included, using the box provided to add named individuals or other classes as appropriate. You should consult your tax and financial advisers to ensure that it meets your financial needs.