Asset Preservation Trusts Explained
Making a Will is not the only way to secure your future. You can also use Asset Preservation Trusts which is also known as an Asset Protective Trust. Trusts are a great way to keep assets safe, retaining security for you and loved ones for the rest of your life. Trusts are, simply put, safety deposit boxes for your assets.
“How do Asset Protection Trusts work?”
Trusts are established in your name and for your benefit whilst you are alive. Your assets are placed into this Trust. When the Trust ends, your trustees will pass the assets on to your beneficiaries for you.
“Why should I bother?”
An Asset Protection Trust allows trustees to pass on your assets without having to go through a complicated process. It may also negate the need for lengthy Probate proceedings. This could save your estate several thousands of pounds.
“Can’t I just give my assets to family members to keep them safe?”
We would never recommend an outright gift to anybody- not even family members. No matter how close you may be to family members now, circumstances can change. What if you gave your house to your child to keep it safe, only for your child to get divorced in the future? Gifting assets is irreversible. Now, your former son or daughter in law has a claim to your home. It can also cause tax problems for your children, as a second home can be considered a taxable asset. Placing your assets into an preservation trust now will give them the most protection in the future. It may also avoid your estate being eroded by around £26,000 – £50,000 a year! (The average cost of residential care in England and Wales).
Doing nothing will mean additional work for your family. It may also lead to the loss of further assets before your death if you need long term residential care. The cost of a asset preservation Trust is usually less than one month’s fees in a care home. Furthermore, it is often much less than the cost of probate through your bank or solicitor.
What is a Lifetime Trust?
Lifetime Trusts are created whilst you are alive rather than within your Will. They can protect your assets whilst they are still in use by you; speak to one of our consultants for a full explanation.
Do Asset Protection Trusts really work?
The simple answer is yes they do, if they are created by experts at the right time and in the right manner. We will always ensure you receive clear, honest advice; furthermore, we will never create a Trust that has no chance of success.