What is a Family Protection Trust.

You Googled ‘Family protection Trust’ and it gave lots of websites about Wills, Inheritance and protecting wealth from the unknown during your lifetime.

 

The bulk of your family wealth is tied up in your home and investments. The Family Protection Trust is designed to ringfence all that into a trust and insulate it from the effects of unexpected liabilities. The majority of websites promote them for protection from Inheritance Tax and Long Term care fees, both of which, can disinherit your intended beneficiaries.

 

 

A Family Protection Trust protects your wealth from statutory disinheritance.

 

 

How does a Family Protection Trust work?

 

It transfers and holds your property and assets into a trust, which is then managed by your trustees.

 

You no longer own it. Your trust holds it in trust for you.

 

Your trustees are now in charge of your assets, and neither they, or the trust is liable for your debts.

 

You can choose your trustees. They can be family and close friends. You just need two more more of them, but above all, they must be trustworthy. So choose them wisely.

 

You then set up and register a Lasting Power of Attorney, giving directions to your trustees, and that gives you the right of use of your family wealth, such as buying a new home, car or setting up a business. In fact anything, as if you still own it.

 

It means a statutory liability, or a Court Order made against you becomes ineffective because your home and assets are no longer available. Remember, you no longer own your assets. You only have the RIGHT OF USE of them.

 

The Family Protection Trust also protects you from sideways disinheritance, such as ‘predatory spouse’, where your child stands to inherit and is vulnerable to divorce or separation taking away your wealth away from your family line or intended beneficiaries.

 

It ensures your wealth benefits who you want it to benefit, and not your beneficiary's creditors.

 

There is no such thing as an ‘insurance policy’ that can protect your wealth in this way.

 

 

The law

 

It’s all 100% legal. The trust follows is the Trustee Act 2000 and the Power of Attorney follows the Mental Capacity Act 2005.

 

Setting up the trust can only be done by a solicitor.