Some Will Writing businesses and solicitor firms offer a service where they create a Trust during your lifetime winto which you transfer some or all of your assets into that Trust for the eventual benefit of your family.
These Trusts go by different names, They are called Family Trusts or Universal Trusts.
Typically these are marketed as a way to avoid having to sell the family home to pay for care home fees in the future. This saving on care home fees can be used as a way to justify the large cost of setting the Trust up.
Let’s start by saying that we don’t offer these types of Trust, nor do we promote them.
This is not to say that they don’t work, but only to say that they may not be as good as they seem, and could even be a total waste of money.
The effectiveness of the Trust is based around why the Trust is being set up in the first place, and whether the gift into the Trust (of say the family home) is deemed to be a permanent and unconditional gift.
If a Local Authority feels that an Asset Protection Trust was set up with the intention to prevent the family home being sold to pay for care home fees, then they may decide that this is deliberate deprivation of capital, They may then ignore the Trust when making their financial assessment to determine who should pay for care home fees, the Local Authority or the individual.
Clients may have been told that they can “change their mind at any time” or “they remain in total control of their assets at all times”. There is a real danger that, if a client believes these statements, then the Trust could be viewed as an artificial or 'scam' Trust, This may have serious and detrimental impact on how the Trust is viewed by Local Authorities and the Courts.
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