01257 463672

Family Protection Trusts

Financial planning is nothing new for any of us, whether it be day to day balancing our income and expenditure or investing money with the view of achieving growth.  In one way or another we all do it and we find that many of our clients in retirement age find that they have managed to do a good job of this either through their own determination or by using a financial adviser to help provide guidance and assistance.

As we reach our retirement years, very often our financial planning takes a new pathway and we start to consider more seriously how we can protect the capital, rather than concentrate purely on growth.  The Family Protection Trust helps us to plan for our later years and to ensure that as much of our inheritance as possible passes onto our children.

The Family Protection Trust can assist in the following areas:

  • Probate and Estate Administration Costs – when we die we will probably need a professional to deal with our Estate which can be an expensive, lengthy and time consuming process.  If however, we put the majority of our assets into a Family Protection Trust, there should be no need to have a cumbersome estate administration procedure.
  • Sideways Disinheritance  – if a surviving spouse remarries without making a proper Will, our whole estate could end up passing to another family rather than our own.  If we set up a Family Protection Trust and place the bulk of our assets into it, then our surviving spouse will have full use of this during their lifetime, however after they have passed away, those assets in the Trust will only pass to  those that we have chosen.
  • Dependent Relative Claims – if a relative comes forward and tries to claim on our estate, they will not succeed unless the claim is made within six years of placing the assets in the Family Protection Trust  and the person claiming can show that avoiding the claim was a significant reason for placing assets in the Trust
  • Children inheriting at the wrong time – unfortunately sometimes our children will have problems and inheriting at the wrong time can be disastrous.  Whether it be a shaky marriage, addiction problems, financial problems or just having a vulnerable child,, receiving a lump sum at a specific point in their lives can have a detrimental effect on our children.  If your assets are in a Family Protection Trust at the time of your death, then the trustees can take a view on when would be the best time to distribute the assets.
  • Inheritance Tax – whilst the Family Protection Trust on its own cannot assist us with our inheritance tax planning it is a very effective tool for helping with our children’s inheritance tax planning, as those assets can be enjoyed without our children passing a 40% liability onto their children.
  • Care Costs – currently 1 in 3 women and 1 in 4 men over the age of 65 go into care and the problem is forecast to worsen in the next generation of our 45 – 65 year olds. The Local Authority can take almost everything to pay for that care. The Family Protection Trust can help if you are concerned that your partner/spouse may have to go into long term care in the future. Early planning is always the best approach however even if it is left late the Trust may still be successful.
  • Incapacity – if we lose our ability to deal with our affairs, then the best solution is a Lasting Power of Attorney.  If however you do not have this in place, the assets within your Family Protection Trust can be managed by your trustees.

The Family Protection Trust solves many different problems. The specialists in this area have been providing these Trusts successfully for the last 10 years and we have all the right experience and knowledge to ensure that this is an effective tool for our clients.

McHale Baker
11 Northern Diver Building
East Quarry
Appley Lane North
Appley Bridge
01257 463672

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STEP - Society of Trust and Estate Practitioners

Institute of Professional Willwriters