Do I need an Asset Protection Trust?

We are getting a lot of enquiries at the moment from people who have been advised to put their home into an Asset Protection Trust (sometimes known as a Family Protection Trust or Lifetime Trust).

There seems to be a lot of marketing material circulating at present encouraging people to put their home into trust to protect their home should they need care in the future, or divorce, or have inheritance tax implications for their estates. But does this actually work, and what are the practical implications?

Sadly, we have seen a lot of situations where people have paid thousands of pounds to set up one of these trusts without a full assessment of their income, assets and personal circumstances.

In some cases, we have seen these trusts set up in situations where it is not advisable or appropriate. Some people have set these trusts up and have not been advised about the new rules in relation to compulsory trust registration with the online HMRC Trust Register.

Some people have been given incorrect tax advice, which has resulted in adverse tax consequences. Some people have been encouraged to appoint a company as their trustees, not realising the company would charge a fee for their services and then take control of the family home after their death.

For every client we see, we carry out a full assessment of personal circumstances, assets and income and will advise on the options available and the practical implications of each. We provide honest advice so our client can then make a decision which is right for them.