Entering the term “Asset Protection Trust” into a well-known search engine will provide you with over 1.2 million webpages talking about the benefits of using a Trust to potentially “ring fence” a client’s assets from a variety of threats and issues. There is no doubt that an adviser should recommend this type of Trust to a client.
On the surface a Probate Preservation Plus Trust (PPPT) and an Asset Protection Trust (APT) can appear very similar, however this is not the case. The client may initially not see any difference in the structure of the document, they might not even see any difference in the price but there will be a significant difference in the level of risk that the client exposes themselves to. By choosing a PPPT, the Advisor will also expose themselves to significantly less professional risk should the client’s circumstances change or misinformation was provided at the outset.
So, what really sets our PPPTs apart from the competition?
In detail:
- Avoids Chargeable Lifetime Transfers
Without undertaking hours of detailed research it may be difficult to figure out how much a client has settled into Trust in the last seven years, even then can we rely on the information we have been given by the client? Our PPPT ensures that, no matter what the client might have done previously, a Chargeable Lifetime Transfer charge will never be payable.
- Avoids Periodic and Exit charges being payable
Property prices have seen year on year increases since the market crash in 2008, this trend is hopefully going to continue for the foreseeable future. If a client moves £325,000 into a Trust now, they will have to pay Periodic Charges in ten years’ time. Our PPPT ensures that, no matter what the value of the Property increases to, there will never be a Periodic or Exit Charge payable.
- Avoids spouse paying unnecessary IHT on first death
We all know that moving a property into Trust and reserving a benefit will not reduce a client’s Inheritance Tax (“IHT”) liability. Increasing property prices can however “catch out” married couples who have moved their property into Trust in their lifetime. The increase in house value above the Nil Rate Band on first death can create an IHT liability as spousal exemption cannot be used. The PPPT ensures that, no matter how much growth in value the Property has experienced, there will never be an “unexpected” IHT liability caused by the Trust.
- Obtains the Residential Nil Rate Band allowance
To qualify for the additional relief a client’s property must pass through their Will (or intestacy) to a “Lineal Descendant”. Any property placed into Trust during a client’s lifetime cannot pass to “Lineal Descendants” as required. The PPPT has been drafted to ensure that, if the clients Executors (Personal Representatives) need to benefit from the Residential Nil Rate Band, the property can fall through the client’s Will to Lineal Descendants.
- Money back guarantee if the Trust is successfully challenged
Setting up a “Asset Protection Trust” can be expensive for a client, there is also no guarantee that the money will not be “wasted” should the Trust be challenged. The PPPT ensures that, if the Trust is successfully challenged, the client will get their fees fully refunded. *subject to satisfying the qualifying criteria.
Which one would you bet on?
With Countrywide Tax & Trust Corporation Ltd, you’ll always be on the winning team.
This article was submitted to be published by Countrywide Tax & Trust Corporation as part of their advertising agreement with Today’s Wills & Probate. The views expressed in this article are those of the submitter and not those of Today’s Wills & Probate.
