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Beware the Risks of Asset Protection Trusts

You may have seen in the press, or been approached directly, by a firm recommending you put your home and savings into an “Asset Protection Trust” sometimes called a Family Protection Trust or Wealth Preservation Trust, you may be told it is a guaranteed way to avoid care fees, inheritance tax or probate delays.  This type of trust is costly to set up and administer and without proper legal advice, these arrangements often go badly wrong.

At PCB Solicitors, we have offices across Shropshire and Mid Wales, including Shrewsbury, Telford, Church Stretton, Ludlow, and Knighton. We regularly advise clients who are worried about care home fees, inheritance planning, and passing assets on to their loved ones. We are also proud members of The Association of Lifetime Lawyers, which means we are qualified and experienced in giving specialist advice on later life planning and trusts.

What is an Asset Protection Trust?

An Asset Protection Trust is a legal arrangement where you transfer ownership of your assets, often your home, into a trust during your lifetime. These are frequently marketed as a way to:

  • Protect your property from care fees
  • Avoid probate delays
  • Reduce inheritance tax

These trusts are often sold by unregulated companies or advisers who are not solicitors. They may promise a quick fix, but the reality is rarely that simple.

Common Risks of Asset Protection Trusts

  1. You may lose control of your home

Once your property is placed into a trust, you may no longer legally own it. This can affect your ability to move, downsize, or release equity. You may need the trustees permission to make decisions about your own home.

  1. There may be tax consequences

Poorly set-up trusts can lead to unexpected inheritance tax, capital gains tax, or stamp duty charges. These are often overlooked by non-specialist advisers.

  1. They don’t always protect against care home fees

Local authorities can investigate whether you have deliberately reduced your assets to avoid paying for care. This is known as deliberate deprivation of assets and could mean your trust is disregarded when calculating your ability to pay for care.

  1. Your trust may be invalid

Trust law is technical, if the document is not correctly drafted or registered with HMRC, it may not have the legal effect you were promised.

  1. No legal protection if things go wrong

If you set up a trust with a non-solicitor or unregulated provider, you have no access to the Legal Ombudsman or the protection of a regulated professional. If a mistake is made, you may not be able to claim compensation.

  1. Cost

These trusts are expensive to set up, often costing several thousand pounds, and often completely unnecessary or disregarded in the future.

Why Choose a Regulated Will Solicitor in Shrewsbury or Telford?

At PCB Solicitors, our team includes experienced will solicitors in Shrewsbury, Telford, and across Shropshire and Mid Wales. We are regulated by the Solicitors Regulation Authority (SRA) and our work is fully insured.

As members of The Association of Lifetime Lawyers, we have specialist expertise in:

  • Wills and Trusts
  • Care fee planning
  • Powers of Attorney
  • Inheritance tax advice
  • Later life planning for individuals and families

We don’t sell one-size-fits-all solutions. Instead, we give you personalised advice based on your circumstances, family needs and future goals.

Before You Sign Anything, Speak to a Specialist

If you are considering an Asset Protection Trust or have already been approached by someone offering one; we strongly recommend that you get advice from a qualified will solicitor who is experienced in trust law.

We are here to help you understand the cost, risks and the alternatives, and to make sure your decisions are legally sound and in your best interests.

Contact PCB Solicitors LLP today to speak with a trusted will solicitor in Shrewsbury, Telford or your local area on 01743 248148.