Asset Protection Trusts are a lifetime settlement used to
provide for a surviving spouse and future generations by
protecting the assets from third party creditors. The trust
works by transferring the legal ownership of the trust
asset to the Trustees for them to hold for the eventual
enjoyment of the chosen beneficiaries.
Placing assets into an APT protects them from sideways
disinheritance and potential claims upon the divorce or
bankruptcy of a beneficiary. Furthermore, probate fees
can be mitigated or avoided altogether as the assets
within the trust are not treated as part of the estate for
probate purposes.
An APT also affords protection against any potential
claim under the Inheritance Family Provisions legislation
following the death of the settlor.
The settlor can transfer assets into an APT whilst
continuing to enjoy the use and benefit of the asset
for the rest of their life.
In the case of the family home, the settlor and their
spouse can still retain a right to reside in the trust property.
The equity of a property which is subject to a mortgage
can be placed within a trust and secured by a restriction
against Land Registry title.
In certain circumstances, an APT provides flexibility for
the Trustees, at their discretion, to maintain one or more
beneficiaries with income or capital depending on their
individual needs.
Assets within a trust can be protected from third party
claims against the beneficiaries and settlor in certain