Family Protection Trusts – what you need to know….
Do you have a Family Protection Trust or an Asset Protection Trust? Are you considering putting either of these provisions in place?
At Wolferstans, we are often contacted by people who are desperate to protect their home. They are concerned that their home is at risk of being sold to pay for their care, or to settle an inheritance tax bill when they die.
You may have heard of companies selling schemes where you give your home to your family in your lifetime or settle your house on trust, often labelled as a ‘Home Protection Trust’ or ‘Asset Preservation Trust’. The companies promoting these types of trusts form part of the trust and estate planning sector, which is largely unregulated.
You may have also heard in the press about the collapse of one such unregulated company and the criminal investigation which has followed: that of Universal Tax Solutions (also trading as Universal Wealth Preservation, Universal Asset Protection Ltd and Universal Trustees Ltd).
We are aware that many companies of this kind have hosted seminars and promised individuals that, should they go into care, the total value of the house would not form part of any financial assessments undertaken by the Local Authority. Attendees are also often told that the value of their house would not form part of their estate for inheritance tax purposes when they die, and they also guarantee that Probate will not be required on their death.
This type of trust can be very costly to set up and we strongly recommend that clients who are interested in transferring their property into a lifetime trust, take advice on the potential pitfalls in doing so. We can also provide alternative options which may give greater flexibility and be more appropriate to your individual circumstances.