Family Protection Trust
Many assume that personal assets accumulated during one's lifetime are automatically passed on to our loved ones and relatives. However, this is not always the case. Setting up a family protection trust (also known as a property protection trust) is one way of protecting your assets when you are no longer able to. These assets including property, money and investments may be written into the trust's deeds and will be divided up exactly how you wish.
Advantages of a family protection trust:
- Avoidance of probate costs: Even if you have named family and friends as beneficiaries of your assets in your will, setting up a family protection trust can save a lot of time, hassle and costs of the probate process when passing them on.
- Care Costs: As our nation's life expectancy increases many more of us now need to consider how we might have to finance care home costs. Your assets such as property and savings are taken into consideration by the Local Authority when deciding on care home funding. Setting up a trust may protect you against unnecessarily selling family home to cover these costs, protecting it for your immediate family.
- Possible lenience regarding tax: In some cases depositing assets into a family protection trust may protect them inheritance and income tax.
There are many options for the donor considering setting up a family protection trust. How you chose to protect your family in a trust is up to you and setting one up can be extremely complicated. The trust's deeds must be written up into a legally binding document and there are many specific rules and regulations regarding tax on the money set aside for children or grandchildren. In many cases you will need to seek legal advice and tell the Tax Office when setting up a trust.
Seeking advice from an independent financial advisor may help to work out if a family protection trust is a viable financial option for you and guide you through the set up and management process:
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