Asset Protection Trusts (APTs) are important estate planning tools for those who wish to protect their assets from many concerns including:
- Protection from Local Authority forced care home fees
- Ensuring your inheritance wishes are carried out
- Protection from sideways disinheritance
- Protection of your assets from creditors
- Inheritance tax (IHT) planning
- Protection of inheritance from beneficiary creditors
Without an APT; vulnerable and disabled beneficiaries could be left unprotected, assets may be sold off to pay for residential care, your family could lose 40% of their Inheritance to IHT, or some beneficiaries may not inherit at all.
What is an Asset Protection Trust?
An Asset Protection Trust is a catch all term for any trust designed to protect your beneficiaries who would otherwise be left worse off. This could be because of inheritance tax, long term care fees, or because the beneficiary themselves is not in a situation conducive to receiving an inheritance directly (e.g. they are disabled, they are bankrupt, they are about to get divorced, etc).
Should you be taken into residential care then your Local Authority will only contribute if all your savings and assets total less than £23,250. This forces you to pay for care that could cost thousands of pounds every month. To do this they can take ownership of your assets and sell them in order to pay for your care. They are obliged to leave you with only £14,250 regardless of the worth of your estate and an APT will often offer protection against this happening. (Note: APT’s will not always protect from care home fees; please contact us for clarification of details or for a personalised assessment.)
In simplistic terms, an Asset Protection Trust works like a safety deposit box in that you can ‘lock away’ your assets, savings and investments. Almost any asset can be placed into an APT. This might be property, some savings, insurances and investments
We can advise, implement and adminster a number of different forms of trust including:
- Flexible life interest trust (FLIT)
- Discretionary trust
- Bereaved minors trust
- Nil rate band discretionary trust
- Disability trust