They were advocating gifting money through a trust prior to transferring assets to their daughter.
So, rather than gifting assets to their daughter as an outright gift, instead, the plan was to gift assets into a trust. Then the trust could lend money to the daughter. She could use the funds as a deposit on a property.
The sales angle was great. By gifting into a trust, after 7 years the assets fall outside the parents’ estate for Inheritance Tax. Good news. If the daughter’s relationship broke down, the assets could be protected as they were a loan from the trust. Good news.
But….
There was no mention of professional fees and charges. The costs of setting up trusts and maintaining trusts have to be taken into account. In addition, it’s important to think about alternatives.
In many circumstances, by thinking outside the box, you can end up with much better outcomes. It doesn’t mean the use of trusts should be ignored, rather it’s vital to be clear about all your options.
If the idea looks great…are you sure you are not dealing with a great salesperson?