Asset Protection Trusts - Can they be trusted?

How are Asset Protection Trusts misleading?

Ninety-five percent of lawyers surveyed in the report had seen clients misled by these schemes. In many cases, clients believed the trusts would protect their homes from care costs; however, in practice these arrangements very rarely offered the protection it was hoped they would provide. Indeed, local authorities frequently treat these trusts as a deliberate attempt to deprive oneself of assets, rendering individuals still liable for care fees regardless.

What are the common problems posed by asset protection trusts?

Some of the most common problems posed by asset protection trusts include:

• Loss of control: once assets are transferred into a trust, you may no longer have the right to sell or mortgage your home without the consent of the trustees
• Unexpected tax implications: Poor drafting can trigger capital gains tax, inheritance tax, or stamp duty liabilities
• Trustee issues: Some firms appoint themselves as Trustees and subsequently cease trading, leaving clients unable to contact or replace trustees
• High costs and inflexibility: Many clients pay £3,000–£5,000 in legal fees up front, only to find the trust offers little – or no – benefit and is costly to unwind

Association of Lifetime Lawyer’s full report

You can read the Association of Lifetime Lawyer’s full report here: Trust or Trap? The hidden dangers of asset protection trusts | Lifetime Lawyers.

How our Private Client team can assist you

Our specialist private client lawyers in London, Kent and the South East have extensive, and specialist experience of providing clients estate planning advice.  If you are looking for estate planning advice, or if you are concerned about an existing asset protection trust, speak with one of our expert private client lawyers today by calling 020 8290 0440.