The goal of a property protection trust is to ensure that your assets are transferred in accordance with your final instructions. You form a trust for asset protection throughout your lifetime, and its assets are immediately distributed to the beneficiaries upon your passing. Property protection trusts are a sort of life interest trust. However, they overlap with trust wills due to the fact that the trust is designated in your will.
It should be noted that there is no legal concept of a property protection trust. The mechanism is a regular trust with a life interest for a beneficiary. The term is often encountered when discussing trusts.
In this article, What Is Property Protection Trust, we take a look at these issues in more depth.
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Free Initial Telephone Discussion
For a free initial discussion with a member of our New Enquiries Team, get in touch with us today. We are experienced in dealing with all the legal aspects of Property Protection Trusts and once instructed, we will review your situation and discuss the options open to you in a clear and approachable manner. Early expert legal assistance can help ensure you are on the best possible footing from the start and also avoid the stress of dealing with these issues on your own. Simply call us on 0345 901 0445 or click here to make a free enquiry and a member of the team will get back to you.
Do I need a property protection trust?
There are numerous reasons to consider establishing an asset protection trust, including:
- To safeguard specific estate assets for heirs, including those who are vulnerable.
- To avoid the costs involved with estate administration through probate.
- To protect your beneficiaries against the possibility of a divorce or bankruptcy in the future.
- To prevent, in certain situations, the payment of unnecessary inheritance tax.
Is Capital Deprivation something to worry about?
If the assets are held by a trust, they are separate from the assets of the surviving spouse. Theoretically, the local authority will not consider the trust’s assets when calculating the amount of long-term care payments owed.
Therefore, it is probable that the survivor will receive further benefits from the local authorities. However, you cannot create a trust to avoid paying local authority care costs, which is known as “deliberate capital deprivation.”
If the local authority considers, based on the facts, that the need for long-term care was reasonably predictable at the time the trust was founded, such as if your or your spouse’s health was already deteriorating, they have broad discretion over what to do with the trust.
Their authority includes access to and evaluation of the trust’s assets. Consequently, it may become necessary to sell the property.
If you want to utilise a property protection trust to lower your capital and avoid paying care fees or other creditors, you should be aware that certain limits prevent such transfers from being effective.
If you wish to minimise your exposure to care expenditures, you may wish to examine the use of a will trust, which grants your spouse rights while safeguarding your portion of the estate should your spouse require care in the future.
What are the disadvantages of a property protection trust?
Establishing a trust for property protection may incur large legal fees due to its complexity. Prior to initiating work for a customer, we will always endeavour to provide a comprehensive pricing estimate. Moreover, you may incur continuous administrative costs to guarantee legal compliance. This makes them a costly option for individuals with limited funds.
A trust for property protection might limit access to and utilisation of the assets it holds. In the event of a financial emergency, you may not have access to liquid cash without the trustee’s permission.
In certain legal contexts, assets put in a trust may still be subject to claims from creditors. It is crucial to employ an experienced solicitor who can ensure that all legal criteria are completed and detect any potential flaws that could jeopardise the security of the trust.
What are the benefits of a property protection trust?
Property protection trusts provide extensive legal protection against creditor claims and judgements made against you or your business. This is particularly useful when addressing financial matters since it ensures the protection of key personal and corporate assets during insolvency proceedings.
When property is placed in a property protection trust, they are removed from the decedent’s estate, minimising inheritance tax payments and easing the probate procedure. This is especially useful if you wish to secure family funds, protect significant property holdings, or administer the estate of a deceased family member.
In addition, property protection trusts offer flexible asset management and distribution. Beneficiaries can be added or deleted at any moment, and trustees have complete control over how trust funds are distributed.
How we can help
We have a proven track-record of advising upon all aspects of private client work. We will guide you through the process and ensure all checks are carried out swiftly and efficiently and we firmly believe that with the right solicitors by your side, the entire process will seem more manageable and far less daunting.to incorporate, what kind of ownership
How to Contact Our Private Client Solicitors
It is important for you to be well informed about the issues and possible implications of setting up a Property Protection Trust. However, expert legal support is crucial in terms of ensuring a positive outcome to your case.
To speak to our Trust solicitors today, simply call us on 0345 901 0445, or click here to make a free enquiry. We are well known across the country and can assist wherever you are based. We also have offices based in Cheshire and London.
Disclaimer: This article provides general information only and does not constitute legal advice on any individual circumstances.
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