Protecting your home
The Asset Protection Trust is designed to protect your property against many of life’s future uncertainties but is equally effective at reducing expensive probate costs (if all the property goes into the Trust); in fact you could save more in reduced probate fees than the cost of setting up the Trust.
Once your property is in the Trust you have the same freedom to move and sell your property as before; except this time it should be easier as you have your Trustees to help you along the way. However, please be aware that you may not be able to raise a mortgage or equity release on your property once it is placed in the trust.
If you are one of the trustees, you will remain in control of the trust once it is set up. If you ever needed to, you could dismiss or replace any of the other trustees.
What are the benefits of a Trust?
The Trust is designed to protect against many threats that you and your estate could face. We appreciate that not all of these may be applicable to your personal situation, however, it is important that you understand the full benefits of the Trust.
1.Sideways Disinheritance – The Family Asset Protection Trust ensures that your estate ends up where you want it to, even after death. This ensures that your children will inherit what you want them to inherit, even if your surviving spouse or partner remarries.
2.Irresponsible Children – Again the trust can help here. It may not be advisable to transfer assets to your children if, for example, they have various dependency problems or are involved in a “shaky” marriage. The Trust has the ability to withhold the funds in this situation until you, or your Trustees, feel it is advisable for the funds to be paid out.
3.Incapacity – We always recommend that all our clients put in place Powers of Attorney. The Family Asset Protection Trust provides additional benefits because the property can be dealt with outside these powers. This means that if you become incapacitated you know that someone you trust can look after your affairs.
4. Family harmony – It may be desirable to avoid problems on death by recognizing the issues now and by doing something about them in your lifetime
5.Knowing where the property will pass on death – Having founded a family trust you will be able to tell where it will go upon your death. It passes upon the terms of the trust which is already in motion when you die. This can add to your peace of mind.
6. Avoidance of delay on death – A property in a family trust can be sold without a grant of representation. The trustees can sign all the paperwork.
7. Retention of a place to live – You can remain in your home as long as you wish unless circumstances change and the property must be sold to buy another suitable property or because you no longer need a home to live in.
8. Passing on the burden of property ownership – You can pass the burden of property ownership to the next generation. The Psychological burden can be lifted from you. It will become the trustees responsibility to deal with the property and not yours.
9. Retention of income and discretionary capital payments – If the home is sold then you remain entitled to an income from it. This means that, if needed, funds will be available to supplement your income should you need to live elsewhere.
There are no further charges involved in setting up the trust and no on-going fees for administering the Trust. If you wish to sell the property in the future or there are any challenges to the Trust then there may be the usual legal charges associated with these issues at that time. If the property is sold in the future and the proceeds held within the trust, an annual tax return and trust management fees may be required.