Trusts

Family Protection Trust


Protect your assets for future generations and control what happens to them
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What Is A Family Asset Protection Trust?

We all work hard throughout our lives for a variety of reasons; to provide for our family, to buy a property, to keep savings for a rainy day and at some point, to pass something on to our loved ones.


A Family Protection Trust helps make sure they inherit what we want them to and when it is best for them to inherit. The Proven Way To Safeguard Assets For You & Your Family's Future. 


Most of us know that by writing a Will this means that after we pass, there is a legal document in place so that those we wish to inherit do. But what about making sure you remain in control of your assets when you are still alive?


The Family Protection Trust has been designed to protect assets during your lifetime and after death, making sure your wishes are taken care of. It is a legal contract where trustees are responsible for holding and protecting your assets. Put simply, it's like a safety deposit box which you put your assets into. You decide what goes into it and you can take assets out at any time, keeping you in control. You are a trustee along with those you trust to act in your best interests. 

"Your Will is what you want to happen.


The Family Protection Trust ensures that it does." 

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How A Family Protection Trust Works 


A trust is set up in your family name and you put your house into it and retain complete control of it during your lifetime.


Additional trustees are appointed so that if you were to lose capacity and are unable to manage your own affairs, others can act in your best interests and administrate the trust.


Assets held in a trust can protect you from various circumstances. If you were to place your home into the trust and at a later stage you went into care, your home would be protected. This means if your house was sold, the proceeds for the sale would be retained within the trust.


The trust remains active for 125 years, even after you have passed. This means that it can stay in place until it's an appropriate time for your loved ones to inherit. For example, if you had a grandchild who was going through a divorce, you could specify that they inherited after the divorce had been settled. 

The Benefits of a Family Protection Trust 

Reason 1: Save On Pobate and Executry Costs 

Typically, Estate administration takes around six months to complete and can be costly. You also need to obtain a Grant of Probate/Executry to be able to administer the Estate.


Having a trust in place means that you do not need this to wind up your Estate. Much of the cost and time for administering your Estate will be reduced as most of your assets are in the trust and can be distributed very quickly.


For example, if your house is worth £200,000 and the cost of administering your estate is 3%, this would be £6000 charged to your estate. By putting your house in trust, this would bypass the cost of this process and leaving more inheritance for your loved ones. 

Reason 2: Let Family Inherit When The Time Is Right

Due to the nature of death, families can inherit at any point. In some situations, it may not be the right time to inherit.


For example, if someone is on benefits due to temporarily being unemployed, they may not be entitled to the benefits if they were to inherit money.


They may also be struggling mentally and having lots of money at that particular time may not be helpful.


The trustees can advise that funds are passed on when the person is in a more stable position and ready to inherit.


Your beneficiaries could be going through a divorce or bankruptcy at the time of your passing and if you just have a basic Will this means their inheritance could be lost or diluted. A Family Asset Protection Trust ring fences the asset to avoid loss against unforeseen circumstances. 

Reason 3: You Keep Control

Should you unfortunately lose mental capacity, and are unable to manage your assets, the courts would step in to protect you.


However, with a trust in place, your trustees can take control and make decisions on your behalf to avoid courts making decisions for you.


This means decisions can be made quicker and will be more personal to you. 

Reason 4: Avoids Sideways Disinheritance 

Families change over the years with marriage breakdowns and new relationships. Many people are concerned about assets being passed on to other families as a result of a second marriage after death.


For example, Mr and Mrs Jones are married for 20 years but sadly Mr Jones passed away. Mrs Jones remarried and her new husband shares the same family home with her. On Mrs Jones' death, typically her new husband would inherit all of her assets which could then be passed on to his children and not Mrs Jones' children.


By having a trust in place allows your spouse to benefit from assets without risk that they will pass on to another family.


The trust allows you to 'lend' assets to your spouse after death. These can be returned to the trust upon their death so that your beneficiaries inherit as you wish. 

Reason 5: Protect Your Assets From Remarriage 

Similar to Sideways Disinheritance, many are worried about losing their assets due to the marriage breakdown.


If you set up your trust prior to marriage and at a later date the marriage breaks down, the assets held in trust will not be taken into account during divorce proceedings, meaning you and your family are protected. 

Reason 6: No Claims On Your Estate

In today's modern world, families come in all different shapes and sizes and it's not uncommon for Wills to be contested by family members.


This can add a lot of stress to the family as well as take time and cost thousands in legal fees. Unlike a Will, which can be contested up to two years after death, a trust cannot, so assets will be distributed as per the instructions you make. 

Reason 7: Protection From Inheritance Tax

Assets held in trust pass to your beneficiaries in a protective capacity, this means assets passed to them will not be taxed upon THEIR death.


They can use the money/assets in the trust during their lifetime without increasing the size of their own personal assets. Ask your consultant for more information on how this works. 

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