Family protection trusts (lifetime discretionary trusts)
A family protection trust is put in place to protect your family property and other assets for your chosen beneficiaries. The assets are put into trust during the settlor’s lifetime. The settlor is both a beneficiary of the trust, so they can enjoy the assets during their lifetime, and also one of its trustees so they can retain some influence over decisions made about the assets.
After the settlor has created the trust, they no longer own the family assets but they can keep benefiting from them.
Why create a family protection trust?
The trustees have responsibility for managing your assets and you, the settlor, can choose how much or how little involvement you want with their administration.
- Your estate is reduced so a Grant of Probate isn’t needed after your death. Instead, the remaining trustees simply distribute your estate according to a Letter of Wishes left with your will. You can change the Letter at any point in your lifetime without having to draw up a new will.
- If you lose mental capacity, a Lasting Power of Attorney may not be needed as the remaining trustees can still manage those of your assets that are held in the trust (which may be all of them).
- No one can contest your will after your death because the value of your estate is held in a trust. This is useful if you have difficult family circumstances.
- Assets held in the trust may be disregarded during a Local Authority means-testing process to assess your ability to pay for care, as long as you had no foreseeable care needs when you created the trust.
What can be included in the trust?
You can choose to protect any or all of the following:
- Your main family home
- Any other property
- Cash held in bank or building society accounts
- Capital bonds (life insurance).
Contact Colin today to book a free, no obligation appointment to discuss your trust requirements.