Introduction
Most people write a will to pass everything to their children outright. It is simple, and for many families it is enough. But an outright gift is exactly that: from the moment it is received it belongs to your beneficiary, and it is exposed to everything that happens in their life afterwards.
A Family Asset Protection Trust takes a longer view. Instead of handing assets over, it holds them for the benefit of the family you name, with trustees you have chosen, so that what you have built supports your children and grandchildren rather than being lost along the way.
What a Family Asset Protection Trust Does
The trust becomes the owner of the assets you place in it, whether that is a property, investments, savings or a share of the estate under your will. Your trustees look after them, and your beneficiaries benefit from them under the terms you set.
Because the assets never become your beneficiary's personal property, they are not automatically caught up in the events of their life. That single difference is where the protection comes from.
It is not about mistrusting your children. It is about accepting that none of us know what the next thirty years will bring, and giving the family a structure that can absorb it.
Keeping Assets in the Bloodline
Ask most people where they want their money to end up and the answer is the same: with their children, and then their grandchildren. Outright gifts cannot guarantee that.
Money left to a son or daughter becomes matrimonial property in practice, gets spent on a joint home, or passes under their own will to a spouse who later remarries. A generation later, the house you worked for can be supporting a family you never met.
A Family Asset Protection Trust is designed to keep the underlying assets in the bloodline. Trustees can still help your daughter buy a house or pay for a grandchild's education, while the capital stays inside the trust for the descendants you have named.
Protection After Remarriage
Remarriage after a death is common, and nobody should begrudge a surviving partner companionship. The difficulty is what happens to the estate.
If everything passed to your husband or wife outright and they remarry, the law treats the new marriage seriously. A new spouse may inherit under a later will, or under intestacy rules if no new will is made, and children from the first marriage can find themselves with nothing. This is often called sideways disinheritance.
Trust structures answer it directly. Your surviving partner can be looked after for the rest of their life, while the capital is preserved for your own children whatever happens next. For the family home specifically, we usually pair this with a Property Protection Trust, and the will structure behind it is set out on our Life Interest Wills (IPDI) page.
Divorce and Bankruptcy of a Beneficiary
A divorce court looks at what each party has. An inheritance already received is a resource that can be taken into account, and in a long marriage where it has been mixed into family finances it may be divided along with everything else.
Bankruptcy and business failure work similarly. A trustee in bankruptcy can claim assets your beneficiary owns, and a creditor cannot be told that money was meant to stay in the family.
Where assets sit in a discretionary family trust, no individual beneficiary has a fixed entitlement to claim or to hand over. That is not a device for defeating genuine claims, and it will not help anyone who transfers assets to escape a debt they already have. Used as ordinary long term planning, well ahead of any difficulty, it gives the family real resilience.
Simplifying Probate for the Next Generation
Assets that are already held in trust do not form part of a beneficiary's estate, so on their death there is less to administer, fewer valuations to obtain and less delay before the family can act.
There is a privacy benefit too. A grant of probate is a public document; a trust deed is not. Families who would rather their arrangements were not on public record often find that reason enough.
Trusts do carry their own reporting and tax obligations, including trust registration and periodic charges depending on the type and value of the trust. We set all of that out honestly before you decide, including the ongoing administration involved, because a trust is a long term commitment rather than a one off document.
Choosing Trustees and Setting the Rules
Your trustees make the decisions, so who they are matters more than any clause in the deed. Many clients act as trustees of their own trust alongside a trusted relative or friend, and we discuss appointing a successor for the years when you can no longer act.
Alongside the trust deed we help you write a letter of wishes. It is not legally binding, and that is deliberate: it tells your trustees how you would like them to exercise their judgement, and it can be updated as circumstances change.
Where a matter calls for it, we work with a local solicitor and are able to cover any and all of your requirements, including property transfers connected with the trust.
Our Family Asset Protection Trust Service
- A free consultation covering your family, your assets and what you want to happen.
- Honest advice on whether a trust is right for you, including when it is not.
- Drafting the trust deed and the matching will provisions.
- Guidance on trustees, successors and the duties involved.
- Help transferring assets into the trust and registering it correctly.
- A letter of wishes written in language your family will understand.
- Ongoing support for your trustees for as long as the trust runs.
Call us on 0800 048 7320 or use the contact form on our home page to talk it through.
Frequently Asked Questions
What is a Family Asset Protection Trust?
Can a trust keep an inheritance in the bloodline?
Working alongside a local solicitor
We work with a local solicitor and are able to cover any and all of your requirements. If in doubt, call us on 0800 048 7320 and ask, or use the contact form on our home page.
Related Services
Trusts
Safeguard your assets, provide for your loved ones, and prevent potential complications through customized trust arrangements tailored specifically to your family's circumstances.
Learn MoreProperty Trusts
Protect your half of the family home so it passes to your chosen beneficiaries. We handle the severance of the joint tenancy and the will trust that goes with it.
Learn MoreLife Interest Wills
A will structure that gives your surviving partner a home and an income for life, while the capital is preserved for the children or other beneficiaries you have chosen.
Learn MoreProtect what you have built
Talk to us about keeping family wealth where you intended it to go.
