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Money laundering
regulations hit family
trusts
The cost of setting up a
trust fund for your
children could rise
dramatically because of
new European Union rules
to crack down on money
laundering.
From December, solicitors,
accountants or anyone else
setting up a trust fund
for a client will have to
carry out detailed checks,
known as due diligence,
on trustees and on
beneficiaries who are
entitled to 25% or more of
the assets. The purpose of
the checks is to make sure
that the trust is not
being used as a way of
laundering money.
This could apply even
when, as in most cases,
the beneficiaries are
children and
grandchildren. Firms who
deal with setting up
trusts are already warning
that it will push up costs
considerably. Vicky
Newman, head of wills and
probate at Andersons
Solicitors in Nottingham,
said the new regulations
place a huge
responsibility on lawyers
to police the system.
“If they get it wrong they
could be open to criminal
sanctions so they have to
make sure the checks are
carried out thoroughly and
correctly. That’s almost
certain to increase the
costs of setting up and
administering trusts.
“Everyone accepts the need
to tackle money laundering
but there is also a danger
of over-regulating
ordinary family trusts
affecting millions of
people.”
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