Paul Thompson, tax & estate planning consultant at Canada Life Limited, explains how your clients can stop their grandchildren frittering away their trust funds.
When giving consideration to making a substantial gift to a young grandchild, it would not be difficult for a client to think that the little bundle of joy now bouncing on their knee will always be the apple of their eye. As a result, it might be very tempting to follow the path of least resistance by creating a bare trust for the absolute benefit of the grandchild. After all, this would be a potentially exempt transfer (PET) for the purposes of inheritance tax (IHT) and that is better than a chargeable lifetime transfer (CLT), isn’t it? Not only that, a bare trust has no periodic cha...
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