In an ever-changing financial climate, it is vital now more than ever that stability and assurance measures are introduced to Will and Estate Planning. Keeping the utmost control over hard-earned valuable assets and preserving lineal wealth has never been easier than now, with the use of the renowned ‘Family Asset Protection Trust’ (FAPT). There are several discrepancies between this structure and that of the standard Will, but both are worth establishing for the sake of a truly interpersonal and safe financial plan. Commonly the Family Asset Protection Trust, which is otherwise known as a ‘Life Interest Trust’, fits with the concept that- unlike a Will which is effective only upon death- a Trust allows the client to make active, conscious, and independent decisions about the transferral of their assets within their own lifetime. It is a matter of giving your client the opportunity to use their own judgment of circumstance and character when establishing the distribution of their Estate.
“A Trust allows the client to make active, conscious and independent decisions about the transferal of their assets within their own lifetime.”
The Structural Benefits
The phrase ‘Discretionary Trust’ is frequently used in association with an FAPT. This is a structure which allows the Settlor of the Trust to take an active role in the details of gifting and transferral, of both assets and responsibilities to their chosen Trustees and Beneficiaries. The given name ‘Trust’ comes into play with the legally binding responsibility in the hands of said Trustees, to ensure that the distribution of assets and protected wealth aligns with the wishes of the Settlor.
For those who seek the peace of mind and stability when it comes to the handling of their preserved estate, a Will falls short because there is limited control over how beneficiaries can utilise assets and familial wealth.
Definition of Sideways Disinheritance
Looking at the concept of ‘sideways disinheritance’, one can outline this lack of control and how it would hinder the protection and preservation of one’s well-earned capital. In the event of death and a spousal transfer, the client relinquishes control of their estate to their surviving partner in the hope that this will be used in accordance with what they believe to be their best interest. With a simple Will in place, the deceased doesn’t have the legally binding protection of an FAPT and therefore is vulnerable to the misuse and potential transferral of capital to an unfamiliar candidate (a new spouse on behalf of their surviving partner). It is here that an FAPT differentiates itself from other Estate Planning structures; it provides total and defined provisions to ensure that the client is in no doubt of how their wealth will be distributed upon their passing.
For example, if the client wishes to leave a sum to one of their lineal grandchildren but has reservations about their age and capacity in handling substantial financial responsibilities, the Trust can be specified to ensure that their share of the estate is only gifted when they are of appropriate age. It is this kind of detailing that maximises the protective capabilities of an FAPT and advances this structure ahead of a basic Will.
Establishing Protection
The FAPT is not only strong in definition, but it also has longevity on its side. A Trust stands for 125 years and allows for a longer period of lineal transfer. Within this time, the contents of the Trust are somewhat fluid and adaptable for the benefit of the Settlor. The Trust works in accordance with any number of tumultuous financial or personal events and its flexibility doesn’t affect the protection of assets in any way shape or form.
For example, if a client were looking to put a property into an FAPT but had the end goal of downsizing within this time, they would easily be able to sell the residence and either put the profit from the sale into the Trust itself or allow for the distribution of the surplus funds to their chosen Beneficiaries.
Trust Vs. Will
Unlike a Will, the Settlor of a Trust can take an active role in organising and even benefiting from their own inheritable estate by writing themselves into the structure as a Trustee or Beneficiary. A Trust, in many ways, allows for the client to take initiative and benefit themselves whilst holding and protecting their assets for their loved ones. This is indicated by the ‘living’ element of an FAPT and the fact that the protection starts immediately upon signing the document with the capacity of Settlors, Trustees, and Beneficiaries. Given the Settlor’s living presence, there can be no room for discrepancies, deceit, or controversy and the FAPT cannot be contested in the same way as the standard Will. This constitutes an effective shelter of protection and assurance.
“A Trust, in many ways, allows the client to take initiative and benefit themselves whilst holding and protecting their loved ones.”
Financial Benefits
The protection of an FAPT isn’t limited to the financial elements of estate planning and inheritance, it goes far in providing reliability and ease for the loved ones who will be inheriting whilst experiencing grievance and loss.
Implementing a Trust often removes the need for the usually long-winded and expensive process of Probate, in terms of the client’s primary residence. The Trust ensures the client knows that their Beneficiaries and Trustees won’t have to prolong their grievance period and relinquish control over the given assets and protected familial wealth, instead they can rest with the knowledge that the FAPT means a smooth and safe transferral.
Furthermore, the Trust provides protection against financial damages and threats such as creditors, divorce settlements and bankruptcy; leaving the client with no doubt that their estate is not vulnerable to involuntary use, removal, or loss.
Our Ethos
At TrustDocs Ltd we operate with integrity and transparency. We remain aware that, on occasion, the concept of a Trust can be promoted and sold at an unreasonable, unrealistic, and deceptive value. With a highly qualified team and a loyal, satisfied pool of clients we have mastered the production of the Family Asset Protection Trust and take pride in offering the refined product to our clients. With a constant stream of open and reliable communication, we can establish exactly what it is our clients need; we ask that they operate with the same honesty that we cultivate here at TrustDocs. Our process starts with an interpersonal consultation which outlines the specific wants and needs of both parties. After this is established the document is expertly drafted, meticulously checked and sent back to our client once it meets the pedigree quality of our documentation standards. Upon finalisation a second consultation takes place to ensure that our client is happy with the work; they leave in no doubt of the process, details and quality of their documents.
Conclusion
The Family Asset Protection Trust holds no requirements, and we believe here at TrustDocs that everyone deserves the protection, stability and financial promise that we can provide. The FAPT empowers Settlors to confidently make decisions about their estate within their lifetime and provides the assurance that their wealth will be distributed according to their wishes when they pass. Whilst an FAPT is flexible and adaptable to the benefit of the Settlor, this flexibility will not affect the protection of their assets. An FAPT also protects against financial threats and allows grieving loved ones to be guided by the client’s wishes when they pass. Clients will be able to take an active role in the organisation of their estate, and can even benefit from assets within their Trust. To learn more about how TrustDocs Ltd can draft an FAPT for you in just five days, click here. For reliable partners, quality communication and fast service, come to TrustDocs LTD for your FAPT.
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What is the cost of a FAPT and are there anniversary fees?