Family Trusts and Asset Protection

Family Trusts and Asset Protection

For many people ensuring that financial assets are passed to their loved ones after they die is of key importance. We can advise on the appropriate steps to enable the transfer of assets from one generation to the next and preserving family wealth.

1. Creating a Family Trust

A Trust is an arrangement by which an individual transfers assets to one or more trustees who will hold it for the benefit of another person or group of beneficiaries. The most widely used form of Family Trust in England and Wales is called a Life Interest Trust.

If a person transfers their property into a Life Interest Trust, the trust will allow them the right to live in the property and receive any income from it for the rest of their life. On their death, specified beneficiaries (for example, their children) would become entitled to the capital of the trust (i.e. the property itself). When carrying out a financial assessment for care fees, a Local Authority should disregard certain assets, including the value of a right under a Life Interest Trust.

We can also advise on UK Inheritance Tax connected with trusts.

2. The Transfer of Property

Property can be transferred outright or into joint names.

We can advise on all aspects of the property transfer  including the following circumstances:

• The recipient of the property may fail to support the person making the gift, leaving them vulnerable and at risk of losing their home. In the event of the divorce of the recipient, their share of the property would be considered as part of their assets in any financial settlement
• Bankruptcy - a trustee in bankruptcy could claim against the recipient's share of the property when selling assets to pay creditors
• On the death of the recipient their share of the property would form part of their estate and would pass under their Will, or, if no Will existed, to the next of kin under the intestacy law
• Care Home Fees - if you transfer assets, whether outright or into a Trust, with the intention of avoiding care fees, then you may be deemed to still own the assets for the purposes of assessing your eligibility for Local Authority funding
• Tax consequences for both the person making the gift and also the recipient

3. Joint Tenancy

Most couples own property as joint tenants. This means that if one of you dies the property automatically passes to the other, regardless of what is in your Will.

If you wish to leave your respective share of the property under a Will to someone else, for example to the children, then your joint tenancy can be severed and you can hold your shares in the property individually.

30 South Street
Ashby de la Zouch
LE65 1BT

Telephone: 01530 414111
Fax: 01530 417022
Office Hours: 9:00am to 5.00pm
113 - 117 London Road

Telephone: 0116 2551901
Fax: 0116 2555864
Office Hours: 9:15am to 5.00pm
21 - 25 London Road
LE67 3JB

Telephone: 01530 834466
Fax: 01530 810886
Office Hours: 9:00am to 5.00pm
William's Yard, Derby Road
DE73 8JR

Telephone: 01332 863810

Office Hours: 9:00am to 5.00pm
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