It is not unreasonable to want to protect what we have worked hard to achieve. Sensible planning can enable assets to be protected from many things.
You may have concerns about paying tax or using assets to pay for care or protecting wealth from immaturity. Protection does not always need to be against an outside force but can also be to ensure future continuity, safety and security.
Making gifts, using allowances and exemptions can enable assets to be passed to younger generations. Protecting these gifts with trusts ensures control can be retained to safeguard assets for the benefit of those younger until they are old enough to manage money responsibly.
Trusts can also protect assets for vulnerable children and young adults. With trustees controlling access to funds they act as a guard against the misappropriation of money and financial abuse from third parties. Funds can be controlled to protect benefits and ensure quality of life.
Asset protection trusts are also useful when it comes to preserving businesses and farmland to ensure continuity for younger family generations to continue to run the family business.
Effective use of trusts in Wills means that half of the family’s wealth, on the first death, can be preserved by passing assets into the trust rather than outright to the surviving spouse. Should the surviving spouse subsequently need residential or nursing care the assets within the trust are not included in their care fee assessment.
Asset protection needs to be considered carefully in light of tax consequences and other legislation. Individual advice is essential before action is taken.