Estate Allocation Trust

Flexibility and Peace of Mind

Asset Protection Trust

For many people, owning a home is less about wealth and more about security, stability, and family. It’s a place to live, raise loved ones, and one day leave behind as a legacy, not just a financial asset. Even in a climate of rising property values, few homeowners have large amounts of disposable cash. That’s why protecting your home, the most valuable asset most people ever own, is so important.

An Asset Protection Trust is a powerful estate planning tool, designed for individuals who want to ensure their home passes safely to their chosen beneficiaries while retaining full rights to live there for life. It is especially suited to mature homeowners, typically living independently, who want peace of mind that their property won’t be vulnerable to unforeseen circumstances later in life.

With the Castle Estate Planning Asset Protection Trust, your home is transferred to a trust that you control. You, as the person setting up the trust (the settlor), also remain a beneficiary. This means you can continue to live in your home for the rest of your life, rent-free, or until you choose to move.

This allows you to safeguard your property from risks such as care fees, family disputes, or third-party claims, while ensuring it ends up in the right hands when the time comes.

What Are the Benefits of an Asset Protection Trust?

At Castle Estate Planning, we help families safeguard what matters most. An Asset Protection Trust offers a powerful and flexible way to protect your home and estate, ensuring your wishes are honoured while providing peace of mind for your loved ones.

Key Benefits of an Asset Protection Trust

Maintain Control While Protecting Your Assets
When you place your home into trust, you (as one of the trustees) retain control, while ensuring that your property passes to your chosen beneficiaries at the right time, typically after your death.
Avoid Probate Costs and Delays
Assets placed in trust can usually be transferred without the need for probate, saving both time and significant legal fees.
Support for Vulnerable Beneficiaries
Trusts are ideal for safeguarding assets for children, individuals with disabilities, or others who may be unable to manage property ownership themselves.
Protection from Relationship Breakdown
If one of your children goes through a divorce, the trust can help shield the family home from financial claims.
Preserve Privacy
Holding your home in trust can help keep ownership private, which is useful in certain personal or financial situations.
Care Fee Protection
In some cases, placing your home into trust may help protect it from being included in a Local Authority means test for residential or domiciliary care (subject to timing and other factors).
Multi-Generational Planning
You can skip a generation, ensuring that your assets go directly to grandchildren, potentially reducing your children's Inheritance Tax liability.

Although not all of these reasons will apply in every case, the impact of just one or two may be sufficient reason to proceed.

Things to Consider Before Creating a Trust

Setting up an Asset Protection Trust is an important decision. Here are some critical points to review:

Personal Circumstances Vary
Every estate is different. We recommend a full review of your financial and family situation to determine if this approach is right for you.
Family Communication
It may be helpful to speak with your intended beneficiaries to ensure transparency and avoid misunderstandings later on.
Impact on Care Costs
If you move into long-term care, your right to live in the property may shift to a right to receive income, which could be used toward care fees. While the capital value is often protected, this is not guaranteed in every case.
Deliberate Deprivation Rules
If it’s proven that you transferred your home into a trust primarily to avoid care costs, the Local Authority may still include it in their financial assessment. The longer the trust is in place before care is needed, the less likely this is to apply.
Gifting Without a Trust Is Risky
Giving your home directly to family members may seem simple, but it can expose your property to risks such as divorce, bankruptcy, or even the premature death of the recipient. It also means you lose control. A trust protects against these pitfalls.
Loss of Eligibility for Certain Grants
In some cases, local authority grants for home improvements (e.g., for disabled adaptations) may no longer be available once your property is in trust.
Equity Release Considerations
Having a trust in place can make equity release more complex. If this is part of your future financial planning, we’ll guide you through the right steps.