Family Asset Protection Trusts
The Family Asset Protection Trust (FAPT) has many advantages and ways of protecting your family's future.
If the deceased's spouse remarries, the inheritance can pass to another family, leaving out the deceased's children. This is known as Sideways Disinheritance and will not happen to assets held within a FAPT.
You remain in control. You place your assets into the Trust and you are the main Trustee. You simply continue using your assets - home, money, investments - just as before.
There is always specialist expertise on hand when needed. If you wish to sell your property and downsize, you will be able to with no complications. You can add or withdraw assets from the Trust at anytime.
Surprisingly, it is not always convenient for beneficiaries to inherit. Inheriting during a divorce would form part of the divorce settlement. This will not happen to any inheritance held within a FAPT.
What Assets can go in an FAPT?
Property, cash and investments.
Married couples and civil partners
Partners who co-habit
Widows and widowers
Who is an FAPT Suitable for?
Even though you may not have an Inheritance Tax (IHT) issue, without a Trust you can unwittingly create a liability for your children. Assets held in trust will not form part of their Estate so will not attract IHT.
Avoid the cost and time of the Probate procedure, typically costing 3% of the value of your Estate and taking an average 9-12 months to complete. Assets held within the FAPT avoid this process and are exempt from Probate fees, usually being transferred to the Beneficiaries within 28 days of death.
There is no legal way that you can dispose of assets to avoid paying care fees. This is called deliberate deprivation of assets and the Local Authority will contest this. Whether you've transferred assets to children or set-up a trust with the purpose of avoiding care fees, it will not work.
However, although care fees cannot be the sole reason for setting up a FAPT, it may be a benefit if set-up at the right time (when care isn't forseeable), for the right reasons and for the right people. As a result, many of our clients have found that the assets held within their FAPT have been disregarded during care fees means assessments.