What is an Asset Protection Trust?
An Asset Protection Trust protects your home and other assets from being sold against your wishes. An APT is in force from the point it is enacted enabling you to have control over your assets during your lifetime.
You can set up an Asset Protection Trust at any time and you can receive an income from the Trust.
An Asset Protection Trust is fully reversible. You are free to change your mind whenever you choose and amend it as you see fit (subject to fees).
What are the advantages of an Asset Protection Trust?
- Avoid the expense and possible time delay of probate
Probate may not be necessary if you have an Asset Protection Trust.
- Protect assets for your children and grandchildren in case of marriage breakdown
Sadly, relationships sometimes fall apart. After divorce or bereavement, be reassured that with an Asset Protection Trust you can safeguard your children’s inheritance should your new relationship fail.
- Only named people can inherit
If your children divorce, you can protect assets so that only they and your grandchildren benefit, not ex-spouses.
- Prevent claims against your estate
With an Asset Protection Trust, you can exclude someone from your estate who may otherwise have a claim against your assets. This could be an estranged child, a parent or other relative. With no claim possible, the situation is clear-cut, and you can avoid lengthy court proceedings and the ensuing costs.
- Minimise inheritance tax
Putting your assets into a Trust reduces the exposure of future generations to inheritance tax.
- Protect your assets from bankruptcy
If you run into serious debt, an asset protection trust can help. It won’t prevent you from being declared bankrupt but it will prevent your assets from being used to pay your creditors. (Please note that it is not possible to do this if you know you may be declared bankrupt in the near future).
- Avoid compromising the benefits status of dependents
If you have a disabled child or dependent who is unable to work and relies on benefits, using assets from an asset protection trust will not affect his or her status and governmental support can continue.
When are Asset Protection Trusts used?
APTs are used to protect assets against unwanted creditors.
If you pass assets to your children directly and they subsequently get divorced then those assets will form part of any divorce settlement. If however they are contained in a Trust then the trustees own the assets and they can allow the children to benefit without direct ownership.
What is the cost of an Asset Protection Trust?
Just Wills & Legal Services will discuss your specific needs and wishes with you and advise accordingly on cost.
Asset Protection Trusts are not appropriate for everyone. They must be set up properly and at the right time in order for you to benefit.
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