An Asset Protection Trust, often called a Family Protection Trust, is a document whereby you [called the Settlor] transfer your interest in your home (and if you wish, other assets) into a trust. From then onwards you will be a trustee of the trust and you will control the trust and be able to make decisions at your absolute discretion.
In addition you will also have the power to be a beneficiary. The trust is not limited to your lifetime which gives tremendous flexibility in the future. The trust is designed to protect your assets from third party claims and also to save on the probate procedure (and probate costs) on death for the assets within the trust.
What does this mean? When a person dies, it is necessary to obtain a grant of probate. Very often this process is carried out by professionals whose fees can be as high as 4% of the value of the estate left on your death. Sometimes families fall out and squabble about property left on death.
Claim on the estate?
Not all families are straightforward and the inheritance act gives the power to a person to challenge your estate. A child or beneficiary that has been disinherited can make a claim against your estate and this can take years to defend and more importantly will cost your chosen beneficiaries a lot of their inheritance. If you do set up a family trust the assets within the trust do not form part of your estate, meaning that the person challenging the estate will not be able to make a claim under the inheritance act against assets held inside he trust.
Please contact the office for a free telephone consultation and any further information about the Family Asset Protection Trust.