An asset protection trust is a way to safeguard your assets to ensure that your intended beneficiaries inherit. It protects your wealth from taxation, creditors, bankruptcy and divorce. Although Asset Protection Trusts cannot be established for the sole purpose of avoiding care home fees, assets placed in a trust are not generally included in local authority means-tests to determine whether you`re eligible to pay your own care costs.
IWC Estate Planning & Management and our partners can assist you in the creation of trusts to protect your assets. We offer consultations where we can discuss the best options for you and your family. Call us to make your appointment
We can help with all aspects of estate planning including:
Why Use One?
Using an Trust is a way to secure your assets, to protect them from various potential threats.
This would be financial issues that affect the beneficiary such as divorce settlements, personal debt, business debts, and bankruptcy. As an example, consider this scenario; your daughter`s marriage is in crisis after it is discovered your son-in-law has committed adultery. She forgives him but you feel that you don`t trust him and eventually, they will probably divorce. Naturally, you would want your legacy to pass to your daughter and grandchildren. Imagine that your daughter inherits and then gets divorced. Your daughter could lose half of her inheritance in a divorce settlement. As an asset protection trust is completely flexible, your assets could have remained in the trust until such problems where resolved. Your assets are therefore protected so they ultimately benefit the person/s that was intended.
Are you concerned that your children run businesses and in the future one day that business may fail? Or perhaps your children have other financial problems? AN asset protection trust can be used to protect your assets from these sorts of issues.
Generally assets placed into a Trust are not subject to Probate fees. If your property was placed into a Trust now, when you pass away, assuming there were no other assets, probate would not be necessary. (Please note inheritance tax is a different matter and placing property into trust does not avoid inheritance tax - careful advice should be sought if inheritance tax applies.)
The Local Authorities
Did you know that anyone who has assets worth over £12,750 must contribute towards their own care home fees? If your assets are worth more than £21,000 you`ll be liable to cover all the cost. This includes the family home. 1 in 4 women and 1 in 6 men over the age of 65 will require residential care, costing between £30,000 and £50,000 a year. The person will be means tested by the authorities who can even put a charge against your property. There are also extremely strict rules about the gifting of wealth to avoid this. If your assets are transferred safely into an asset protection trust, they will not be included as part of your wealth. You`ll avoid your estate being used to cover care costs and your beneficiaries will receive their entire legacy. However it must be noted an asset protection trust cannot be set up in order to avoid care home fees.
Many people fall foul of these threats as they do not plan ahead. For instance, thousands of elderly people lose their homes each year to cover the cost of long term care. Don`t let it happen to you. Estate planning is the key to safeguarding your assets and your family`s future inheritance. An asset protection trust is a great method to do this; giving you a lifetime interest in the assets. IWC can arrange all this for you, for a low-cost, fixed fee. Call us to book your consultation.