family asset protection trust
Your home. Your choice.
Your family home. You worked hard for it your whole life, you have made many wonderful memories there, your home means a lot to you. You’ve put a Will in place to outline your wishes, but did you know that this alone will not prevent external factors interfering with your final estate.
In fact, there are six main problems which could seriously threaten your estate.
Probate Costs & Administration
So, what exactly is probate?
Probate is the legal process of administering the estate of someone who has died.
The process can be extensive and expensive - often taking up to 12 months to complete.
Any assets held in trust are not administered by probate. For the price of your Family Asset Protection Trust, your estate will benefit from a significant financial savings; with the added bonus of taking the stress away from your family and loved ones as they will not have to administer the probate process at what will be an already difficult time for them. Assets within a trust are usually transferred to the beneficiaries within 28 days of death.
Children inheriting at the wrong time
During events such as a divorce, it may not be the best time for your loved ones to inherit as it could form a part of their divorce settlement. If they are receiving state benefits, the inheritance could cause their benefits to be lost, reduced or sanctioned.
In the event of you or your spouse dying, and the survivor remarries - the inheritance can then pass to another family, leaving out your own children, otherwise known as sideways disinheritance. Assets in a trust are protected from sideways disinheritance - giving you peace of mind that your assets will go to those intended.
Claims on the estate
Every family has its twists and turns, some are more complicated than others and you may wish to choose to leave a child out of your Will. That child does have a lawful right to contest the Will and make a claim on the estate, and more often than not, the child is successful in doing so. A trust however, is significantly more difficult to contest - making it far less likely that your assets will be passed to a family member that you do not intend.
Do your assets total over £23,250? Currently, you may not be entitled to state help with your care costs. Ultimately, leaving many families with no choice but to sell their home to fund care home fees.
There is absolutely no way to dispose of your assets to avoid paying for care fees legally. This is called deliberate deprivation of assets and the Local Authority will contest this and they will succeed. Whether you have transferred assets to children or set up a trust with the sole purpose of avoiding care fees - it will not work.
The reason for setting up your Family Asset Protection Trust cannot be to avoid paying care home fees - but this may be a benefit if you set up your trust at the right time (when care isn’t in your foreseeable future), you set up your trust for the right reasons and for the right people.
As a result, we have had many clients find that the assets held in their Family Asset Protection Trust have been disregarded during care fees means assessments.
Children’s Inheritance Tax
Even if you do not have any issues with Inheritance Tax, without a trust, you can unwittingly create an issue for your children. Assets left to them in a trust will not form part of their estate so will not attract Inheritance Tax.