Asset Protection Trusts

Safeguard Your Assets with Asset Protection Trusts

Asset protection trusts (APTs) are legal arrangements that can be used to protect an individual’s assets from potential risks and threats, such as lawsuits, bankruptcy, divorce, or creditors.

APTs are typically set up as irrevocable trusts, which means that once the trust is established, the assets placed into the trust cannot be removed or changed without the agreement of the trustees.

The assets placed into the trust are managed by a trustee, who is appointed by the individual setting up the trust (known as the settlor). The trustee has a duty to manage the trust assets for the benefit of the trust beneficiaries, who may include the settlor and/or their family members.

One of the key benefits of an APT is that it can provide protection against potential claims from creditors, as the assets held in the trust are legally separate from the settlor’s personal assets. This means that if the settlor faces legal action or bankruptcy, their creditors may not be able to access the assets held in the trust.

It’s important to note that APTs must be established carefully and with the advice of a qualified professional, as there are legal and ethical considerations to take into account. Additionally, while APTs can provide valuable protection, they are not foolproof, and there are circumstances in which assets held in a trust may still be vulnerable to claims from creditors or legal action.

Furthermore, the use of APTs is subject to scrutiny from tax authorities in the UK, particularly with regard to the potential avoidance of inheritance tax (IHT). As such, it’s important to seek professional advice and ensure that any APTs established comply with relevant tax laws and regulations.

For further advice on Asset Protection Trusts from experts that specialise in dealing with all aspects of estate planning, please contact us through our confidential online enquiry form or telephone 01327 317388