Assets Charts - Are trusts included in the assets/net worth charts?

Q - Are trusts included in the assets/net worth charts? If so, why are they included since they aren't part of my client's estate? 

A - The general assets charts (Assets by Type and Assets by Tax Type) show all assets, not just those that comprise the client and spouse or partner's estate.

The Liquid Assets chart, on the other hand, provides a view of readily accessible assets that excludes trusts, with the exception of child trusts, which can be used to fulfill expenses. Discounted gift trusts, other trusts (bare and discretionary), charitable trusts, spousal bypass trusts, and loan trusts are all excluded from liquid assets. 

Note: Venture Capital Trusts (VCTs) and Enterprise Investment Schemes (EISs) are included in the liquid assets charts although they are not subject to ad hoc withdrawal due to their tax rules. To draw incomes from these investments you would need to schedule planned withdrawals from the accounts. 

      

The Net Worth chart summarises your clients assets, excluding trusts, but the Plan Worth is an alternative chart view which does include the value of any trusts, so that you can see a comprehensive view of all the assets within a plan.

You can, of course, use the Dual chart view, in order to compare two different charts within one plan, or you can use the Compare Chart view, to compare the same chart in your Base plan and a what if scenario.

For an assessment of what falls within and without your client's estate, see the Overview > Legacy reports. For purposes of comparison, this overview shows at time of death the individual's overall asset holdings in one column and the estate value of these holdings in another column to the right. A trust would have a null estate value. 

 

One reason we track trusts as assets is that some clients do want to see their growth charted - to see any contributions they make into trusts grow over time. 

A trust could also be the source of potential withdrawals in the future, even though they are never subject to ad hoc withdrawals made by the software for supplemental top-up income. One would have to schedule a withdrawal to pull funds from a trust. 

If you don't intend to track a trust as an asset, consider excluding it from the plan. 

 

Other options for entering PETs

With this said, there are options other than simply disregarding trusts, if you want to track recent Potentially Exempt Transfers (PETs) that have been made within the seven years prior to the beginning of the plan or plan for future PETs and other gifts. 

Aside from scheduling future transfers into a bare trust (which would be entered in the software on the Investments screen as an Other Trust set with a Bare Trust Structure), future PETs can also be scheduled on the Expenses > Legacy screen.

   

Any PETs made up to seven years prior to the beginning of the plan can be recorded on the Taxes screen > IHT Nil Rate Band Carryover > Previous Potentially Exempt Transfers.  

  

  

In either case, these transfers will be tracked and if the person dies within seven years of making the gift, some of the relief may be clawed back into the estate, respective of the Nil Rate Band and annual gifting allowance. 


Setting child owned assets to leave the plan after a given age

You will find in Preferences, in Plan Preferences to the right side of the screen, the Default Ages panel. The "Child Accounts Available in Plan Until Age" preference is found on this panel. It is at this age that any assets owned solely by the child will drop from the plan and thereby disappear from the assets charts. 

If a child trust fund is set in the plan as being "owned by the child", that account would no longer be tracked by the software, in this example, when the child turns 25. The child trust fund would drop out of the asset charts and the plan in general at that point in time.